Interest rates on new mortgages recorded their biggest jump since late 2021 in September as borrowers reeled from the financial turmoil unleashed by the government’s mini-budget.
Data from the Bank of England showed that the effective real interest rate on new mortgages rose by 29 basis points in September to 2.84 per cent, while new mortgage approvals dropped sharply to 66,800 from 74,400.
The UK’s mortgage market was temporarily thrown into turmoil last month, with lenders withdrawing hundreds of loan deals, in the aftermath of the mini-budget, which caused a steep rise in government bond yields and pushed up future interest rate expectations to 7 per cent.
British households are among the most vulnerable in the world to rising interest rates and higher government
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