MORTGAGES are set to rise again as Britain’s borrowing costs soared.
Gilt yields, the interest paid to investors in government bonds, are now higher that when doomed PM Liz Truss’s mini-Budget caused a markets meltdown last year.
GettyMortgages are set to rise again as Britain’s borrowing costs soared[/caption]
Zara Farrar / HM TreasuryChancellor Jeremy Hunt said: ‘We are really very aware of the pain felt by many families’[/caption]
The trading of bonds, known as gilts, are used to price mortgages and loans.
When interest rates go up, prices drop and yields go up. Strong wages growth of 7.2 per cent this year has pushed up inflation.
It is feared the Bank of England will now have to further hike interest rates to try to bring inflation under control.
The rise in yields also makes it more expensive for governments to borrow.
Samuel Tombs at Pantheon Macroeconomics said: “The renewed pick-up in wage growth will add fuel to the recent rise in gilt yields and expectations for the future path of the bank rate.”
The BoE is predicted to hike rates again tomorrow from 4.5 per cent.
Chancellor Jeremy Hunt said: “We are really very aware of the pain felt by many families.
“But the biggest single thing that we can do is support the Bank as they bear down on inflation.”
Meanwhile a record 2.6million people are signed off work with long-term sickness.