Lunchtime news Friday 11 April 2023

Despite yesterday’s decision by the Bank of England’s to cut the base rate, many people will still be hit by higher mortgage costs after several lenders raised their charges last night. Nationwide, Royal Bank of Scotland, Alliance & Leicester and Britannia Building Society all raised their fixed rate deals. But several banks, including Halifax, Lloyds and Barclays, gave some respite to homeowners by reducing their tracker mortgage rates.

And it has been revealed that HSBC, which controversially promised to ‘match’ existing fixed-rate mortgages for those currently coming off deals, is intending to charge arrangement fees of up to £5,000. The fees would vary according to the rate being matched and the amount borrowed, and HSBC admitted some potential customers would find the amount prohibitive.

The European Central Bank (ECB) refused to cut the European base rate yesterday, and called on unions and companies to hold off wage demands and price increases to avoid adding any further inflationary pressure. Inflation in Europe is running at a 16-year high of 3.5 per cent, significantly above the target of 2 per cent.

The chancellor Alistair Darling is today expected to call for a new global early warning system to identify potential problems in the world economy, as part of a series of reforms to the International Monetary Fund. Mr Darling is particularly keen on creating a new council that would allow finance ministers to exercise greater control over the workings of the Fund.

A property research group, UKValuation has suggested that sub-prime lending in the UK could be a lot worse than assumed, as a large number of homeowners have more than one loan secured on their property. Particularly vulnerable are people who bought flats with a high loan-to-value ratio during the past few years.

And finally, yesterday’s story about ending ‘student ghettos’ in university towns has come under criticism from the British Property Federation (BPF). The BPF warned that any measure to avoid share housing would ‘go against government policies to support communities’. Imposing planning restrictions would choke supply, drive up rent and leave those most in need of affordable private renting without a home, they said.