Since the unexpected rise in UK inflation predictions for UK interest rates have significantly increased. A quarter point rise is now almost certain at the next monthly meeting.
IN the medium term interest rates in the UK could rise to 6%, previously they were expected to peak at 5.5%. However it depends on how UK consumers respond to further increases in interest rates.
This rise in inflation and interest rates is bad news for UK home owners. Those on variable mortgages will see their interest payments increase. Those looking for best fixed rate deals will be faced with less attractive fixed rates. Many of the leading lenders have already removed their lowest fixed rate mortgage offers.
The Alliance and Leicester Building society is replacing its fixed rate mortgages with deals that are typically 0.3% higher than current rates.
The Halifax Building society has withdrawn its best fixed rate mortgage today.