Executives look to raise prices as UK's inflation crisis continues

The UK's inflation crisis continues to put pressure on the economy, with no signs of easing up in the coming days. Several executives in the country have predicted that inflation in the UK would be higher than the Bank of England’s target for a few years.

The inflation amplified after the announcement of the mini-budget a couple of weeks ago. As the five-year fixed-rate mortgage crossed 6% on Thursday for the first time in more than 12 years, Chancellor Kwasi Kwarteng is expected to meet with the UK’s prominent lenders. The 6.02% fixed-rate mortgage rate is not the highest since February 2010, while the two-year fixed-rate mortgage touched 6.11% on Wednesday, the highest in 14 years.




The rise in mortgage rates will burden the borrower with an additional £10,000 on a two-year fixed-mortgage than the same type of loan drawn last December, for a loan of £200,000 to be repaid in 25 years. Following Kwarteng’s announcement of the mini-budget, top lenders in the UK, like Barclays and NatWest, pulled 40% of mortgage products from the market. The Chancellor will be meeting these lenders and discuss with them short-term plans.

Some of the pulled mortgage products were making their way back to the market, albeit at higher rates.

FAQs

1. What is the current five-year fixed-rate mortgage rate?
   The cost of the fixed-rate mortgage rose to 6.02% on Thursday, the highest since February 2010.
2. When was the mini-budget announced?
   Chancellor Kwasi Kwarteng announced the mini-budget on September 23, which has created a lot of furore among the opposition and many Tories.