UK mortgage costs may rise as interest rates are expected to increase

Economy · First reported 2 Nov, 06:00 · Updated 11:40

The reports focus on an expected Bank of England rate rise and the pressure it could add for households renewing mortgages.

The Bank of England’s Monetary Policy Committee is widely expected to raise the base rate from 3.75% to 4%; the decision was due on 5 November.
More than 2.3 million UK households are expected to come to the end of fixed-rate mortgage deals in 2027, potentially facing higher repayments.
The reports connect higher borrowing costs with inflation and energy prices; the Guardian also cites forecasts of falling disposable incomes and rising household energy bills.

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Key facts

Expected base-rate decision: A move from 3.75% to 4% was widely expected; the Guardian gives the decision date as 5 November.
Mortgage renewals in 2027: More than 2.3 million UK households are expected to reach the end of fixed-rate deals.
Earlier renewals: The Guardian reports that 700,000 borrowers had been forecast to move to new rates between July and December of this year.
Inflation: UK inflation was reported at 3.5% in September.
Disposable incomes: The OBR forecast a 0.6% fall in household disposable incomes next year after inflation.