Category Archives: Money

‘We’re kicking ourselves that we didn’t do a five-year mortgage fix in 2021’

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Anguished families talk about how the Bank of England’s 13th consecutive interest hike is affecting them – and their fears for the future

Liam, 36, a senior IT manager and married father-of-one from Newcastle upon Tyne, is one of millions of homeowners whose mortgage payments will rise even higher after the Bank of England on Thursday put up the base interest rate to 5% – a 15-year high.

Together with his husband, Liam bought his four-bedroom house in 2019 for £269k, and the couple’s three-year mortgage deal, refixed at 1.64% in 2020 just before the first lockdown, expired in March.

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From Brexit to Beyoncé: why UK inflation is still so painfully high

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The cost of living is falling in Europe and the US but is still rising in Britain. We look at the major culprits

The Bank of England has struggled to understand why inflation remains high in the UK. It has fallen in France, Germany, the US and especially Spain, where inflation dropped to 2.9% in May compared with the UK figure of 8.7%. Here we look at the many reasons for the current crisis.

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Labour piles pressure on Sunak with plan to prevent ‘mortgage catastrophe’

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Shadow chancellor Rachel Reeves says party would force banks to take a range of steps to protect borrowers

Labour has piled further pressure on Rishi Sunak to take action to help struggling mortgage holders as the Bank of England prepares to raise interest rates again to levels not seen since before the 2008 financial crash.

Rachel Reeves, the shadow chancellor, said on Wednesday that if Labour were currently in power, it would force banks to offer a range of support to borrowers, including letting them move on to interest-only mortgages and extending their repayment period.

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Sunak, Hunt and homebuyers brace for an economic Big Wednesday

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The midweek inflation bulletin could be the most significant piece of government data published this year

This Wednesday will mark the longest day of the year and not long after the sun comes up the Office for National Statistics (ONS) will publish its latest cost of living bulletin. To say the data is eagerly awaited is an understatement. There is unlikely to be a more significant piece of official data released in the current parliament.

The reason is simple. Despite raising interest rates 12 times since December 2021 in an attempt to quell upward price pressures, inflation is proving harder to shift than the Bank of England imagined.

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UK homeowners face huge rise in payments when fixed-rate mortgages expire

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More than 2.4m deals are ending in 2024, raising fears of financial timebomb

More than a quarter of UK homeowners on a fixed-rate mortgage are heading for sharp increase in monthly payments before the next election, in a financial timebomb that will rock the Conservatives just as voters prepare to choose the next government.

With the Bank of England expected to increase its key interest rate next week for the 13th time, figures shared with the Guardian by UK Finance, the banking industry trade body, show more than 2.4m fixed-rate homeowner deals will expire between now and the end of 2024.

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‘I’m left with nothing’: Nigerians feel brunt of economic shakeup

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President Tinubu’s policies please foreign investors, but a devalued currency and soaring petrol prices mean ‘national sacrifice mode’ is widely unpopular

Nigerians are feeling the strain as their new president pushes through a series of unpopular policies that have earned him praise from foreign investors.

Bola Tinubu, who was sworn in on 29 May, has surprised many observers by taking a running start to his tenure of Africa’s most populous country. In little over two weeks he has banished a longstanding petrol subsidy, ejected the country’s central bank governor and ended restrictions on the rate of the naira, Nigeria’s currency.

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UK government urged to outline plans to help with winter energy bills

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Report by cross-party MPs criticises previous ‘lack of urgency in addressing market failures’

MPs have urged the government to set out its plans to protect households from high energy bills this winter as they said about 1.7 million people, including some of the most vulnerable groups, had been left waiting too long to receive previous support.

The public accounts committee (PAC) said that although schemes were introduced quickly, the government “did not have the bandwidth” to make sure help reached all groups in a timely fashion.

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Labour says ‘Tory mortgage penalty’ costs homeowners extra £7,000 a year

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Opposition finds fallout of Liz Truss mini-budget has raised average mortgage interest payments by £150 a week in two years

Homeowners are being hit with a “Tory mortgage penalty” of £7,000 a year with interest rates triple what they were two years ago, according to Labour.

Pat McFadden, shadow chief secretary to the Treasury, blamed what he called the “reckless economic gamble” taken by the Conservatives during September’s mini-budget when Liz Truss was prime minister.

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Housebuilders cut back on construction as UK mortgage rate rises spook buyers

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Work on residential building sites slips in May to weakest level since 2009

Britain’s housebuilders are cutting back on the construction of new homes amid signs that potential buyers are being spooked by the prospect of increases in mortgage rates over the coming months.

The latest report on the construction sector found that work on residential building sites slipped in May to the weakest level since 2009, apart from when sites were locked down during the Covid pandemic.

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No point in food price measures without targeting small stores, Which? warns

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Consumer group tells chancellor ‘blanket approach’ will not address poor households’ access to affordable food

UK ministers’ efforts to reduce soaring food shopping bills “won’t touch the sides” without measures to make small grocery stores more affordable for low-income households, the chancellor has been warned.

Which?, the consumer group, has written to Jeremy Hunt over concerns that a blanket approach to lowering supermarket bills will not address the problem of accessibility to affordable food, after reports that ministers are considering a voluntary price cap scheme.

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Thames Water accused of ‘flimsy PR stunt’ over bonus as boss’s pay swells

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Sarah Bentley lands £1.5m package despite saying she would shun bonus amid criticism of water companies

Thames Water has been accused of conducting a “flimsy PR stunt” as it prepares to report that its chief executive has landed nearly double her annual salary with a £1.5m pay package – after announcing that she would shun her bonus amid intense criticism of Britain’s water companies.

Sarah Bentley said last month that she and the firm’s finance chief, Alastair Cochran, would forgo their bonuses and any payments due under long-term incentive plans for the 2022-23 financial year.

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Holiday lets nearly negate supply of new homes in tourist areas, study shows

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Campaigners say second homes and holiday lets are taking homes away from residents in hotspots such as Devon and Cumbria

The supply of new homes in some tourist hotspots is being almost completely negated by the rise of second homes and holiday lets, analysis has revealed.

In the Copeland area of the Lake District, which includes the beauty spot of Scafell Pike, there were 426 new homes created in the last three years. Over the same period, 407 existing homes were converted to commercial holiday lets or second homes.

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Lone renter in ‘David and Goliath’ row with Montreal developers

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Carla White’s battle has shone a light on city’s lack of affordable new housing for those on low incomes

A single tenant in a Montreal apartment block has halted a multimillion-dollar development project in a standoff that has focused fresh attention on the lack of affordable housing in major Canadian cities.

Property developer Mondev has been trying for years to persuade Carla White to move from her small C$400-a-month (£238) apartment so it can demolish a row of mostly abandoned buildings and build 176 luxury apartments.

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HSBC increases interest rates on some savings accounts

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Rises of up to 0.75 percentage points follow increases at First Direct

Customers of HSBC will receive a boost to their savings after the bank announced an increase to interest rates, as Britons enjoy some of the highest rates in more than a decade.

The lender is increasing rates on some of its savings accounts, with increases of up to 0.75 percentage points.

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Agreed house sales in UK at highest point this year, says Zoopla

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But property website warns that rebound in activity could be hit by rising mortgage rates

More prospective house sellers are returning to the UK’s property market, pushing agreed home sales to their highest point of the year in May, according to Zoopla, although it warned that the rebound in activity could be knocked by rising mortgage rates.

House prices have fallen by 1.3% nationally over the past six months, the property website found, but the speed of price falls has been decreasing as buyer confidence slowly improves.

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Covid pandemic blamed for UK rise in cracked tyres

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Motorists urged to carry out safety check as rubber on cars left idle for long periods can deteriorate

There has been a sharp rise in the number of cars with cracked tyres – which can result in an MOT failure – because of vehicles lying idle during the coronavirus pandemic.

Figures from Kwik Fit, the car maintenance chain, show that its mechanics saw almost twice as many cars with premature cracking last year compared with before the lockdowns.

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UK homeowners and first-time buyers warned to brace for 5%-plus mortgage rates

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Lenders forced to raise fixed-term deals after latest inflation figure pushed swap rates upwards

Households looking for a new mortgage deal have been warned to expect 5%-plus fixed-rate deals in the coming weeks, after Wednesday’s inflation figures sent the money markets back into turmoil.

Nick Mendes, the mortgage technical manager at the broker John Charcol, said on Thursday that he doubts that there will be any two-year fixed-rate mortgages and probably few five-year deals priced at less than 5% in the coming weeks, as lenders are forced to reprice their mortgages upwards.

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Staff work in central London offices for 2.3 days a week, study finds

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Thinktank warns against wholesale switch to working from home and raises fears over lost productivity in capital

Office workers in central London are spending on average 2.3 days a week in the workplace, according to a report that warns against a wholesale switch to working from home.

The thinktank Centre for Cities carried out polling of office workers in the capital and found they were spending 59% of the time in their workplace compared with pre-Covid levels.

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South West Water under investigation over leaks and usage figures

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Shares in owner Pennon Group fall as it says Ofwat has launched inquiry into South West Water

South West Water is being investigated by the industry regulator over whether it accurately reported leaks and figures showing how much water is used by its customers.

Pennon Group, which owns South West Water and Bristol Water Group, told its shareholders Ofwat had announced an investigation into the company’s operational performance during 2021 and 2022.

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‘The whole thing stinks’: UK water firms to pay out £14.7bn in dividends as customers foot sewage costs

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With cost of cleanup to be passed on to bill payers, analysis shows they will also pay £624 more by 2030 to fund investor payouts

Water companies will pay an estimated £14.7bn in dividends by the end of this decade, while making customers pay for new investment to stem the tide of sewage pollution in seas and rivers, analysis for the Observer has revealed.

Liberal Democrat MP Tim Farron denounced the billions going to shareholders as “absolutely scandalous” while families struggling with the cost of living would be facing increases in bills to pay for the sewage cleanup.

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