Katie Tucker said: “Swap rates have been increasing for the past three weeks in expectation of another rate rise and this is being reflected in the rising fixed rates that have come onto the market. Many lenders have today given notice of withdrawal of their current fixed rates but are yet to announce replacements. Inflation has now reached 3.1%, more than 1% over its target of 2%.
"Mervin King's letter to the Chancellor stated that this was because of an unexpectedly sharp increase in utility costs and global reduction in food supply pushing up domestic spending, combined with rapid growth in money and credit. The Monetary Policy Committee reacted quickly to the last inflation hike with a quarter point rise so that they wouldn't have to act later with a larger one, so the city expects that they will do the same now to curb high-street spending sooner rather than later.
"We are urging borrowers to act quickly if they want to secure fixed rates while they are still available. Alternatively, if you are prepared to take the long term view that rates will come down again in the next year, borrowers could look to take out a tracker with no Early Repayment Charges so that they can switch out if and when fixed rates improve. We have an exclusive lifetime tracker with no arrangement fee that would suit this course of action.”
