More than 1.4 million fixed rate mortgage customers are facing the prospect of significant hikes to their monthly payments when their deals end this year, according to official figures.
The Office for National Statistics (ONS) said 57% of those coming up for renewal in 2023 were fixed at interest rates below 2%.
It added that deals set to mature next year will be from two-year fixed rate loans made in 2022 and five-year fixed rate deals made in 2019, when “mortgage rates were generally higher than 2%”.
Its report on housing costs, using Bank of England data on transactions, showed that 353,000 fixed rate mortgages were due for renewal during the first three months of 2023.
It comes at a time when the cost of a fixed term home loan continues to recover from the peaks seen – way above 6% – last autumn when the market suffered a shock at the hands of the-then government.
Households on tracker and standard variable deals have endured rising bills for over a year – reflecting the surge in the cost of borrowing imposed by the Bank through interest rate rises to curb inflation.
The energy-led spike in the cost of living has added to a variety of bills – squeezing consumer spending power and leaving the country on the brink of recession, according to economists.
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Fixed rate mortgage costs, however, were subjected to something of an own goal as they rose sharply in the wake of the Liz Truss government’s uncosted mini-budget which spooked financial markets.
The mayhem prompted the cost of fixed term mortgage deals to rise as lenders pulled products temporarily to ensure they reflected higher funding costs.
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Data from financial information service moneyfacts.co.uk on Monday showed average two-year fixed rates at 5.75% – falling to 5.57% for five-year deals.
Both had stood just above 4% in early September – weeks before the now defunct growth plan was revealed.
The Bank of England warned last month that homeowners were facing an annual increase of £3,000 to mortgage bills – exacerbating the cost of living crisis.
It is widely expected that policymakers in Threadneedle Street will raise Bank rate further – from its current level of 3.5% – in the first half of 2023 in a bid to maintain pressure on inflation.
Analysis from the Resolution Foundation think tank, released separately on Monday, suggested families had only experienced half the lost income they are expected to endure so far because of rising costs.
Myron Jobson, senior personal finance analyst at interactive investor, said: “Housing costs are going through the roof and are set to become even more expensive for many Britons in the coming months.
“Housing is the biggest expense for most households, so even a modest percentage increase in these costs could translate to a significant amount in pounds and pence terms.
“The climb in interest rates over the past year has marked the end of the golden era of cheap mortgages.
“Home loans have hit levels not seen since the financial crisis and the spectre of further hikes in the base rate is set to pile more misery on mortgage holders and wannabe homeowners alike at time when household budgets are reeling from the cost-of-living squeeze on finances.”
A spokesperson for loan trade association UK Finance said: “Lenders stand ready to help customers who might be struggling with their mortgage payments, with a range of tailored support available.
“Anyone who is concerned about their finances should contact their lender as soon as possible to discuss the options available to help.”
An industry body has warned that the equivalent of more than one pub a day is set to close across Great Britain this year.
According to the British Beer and Pub Association (BBPA), an estimated 378 venues will shut down across England, Wales and Scotland.
This would amount to more than 5,600 direct job losses, the industry body warns. It has called for a reduction in the cumulative tax and regulatory burden for the hospitalitysector – including cutting business rates and beer duty.
The body – representing members that brew 90% of British beer and own more than 20,000 pubs – said such measures would slow the rate at which bars are closing.
BBPA chief executive Emma McClarkin said that while pubs are trading well, “most of the money that goes into the till goes straight back out in bills and taxes”.
“For many, it’s impossible to make a profit, which all too often leads to pubs turning off the lights for the last time,” she said.
“When a pub closes, it puts people out of a job, deprives communities of their heart and soul, and hurts the local economy.”
She urged the government to “proceed with meaningful business rates reform, mitigate these eye-watering new employment and EPR (extended producer responsibility) costs, and cut beer duty”.
“We’re not asking for special treatment, we just want the sector’s rich potential unleashed,” she added.
The government has said it plans to reform the current business rates system, saying in March that an interim report on the measure would be published this summer.
From April, relief on property tax – that came in following the COVID-19 pandemic – was cut from 75% to 40%, leading to higher bills for hospitality, retail and leisure businesses.
The rate of employer National Insurance Contributions also rose from 13.8% to 15% that month, and the wage threshold was lowered from £9,100 to £5,000, under measures announced by Rachel Reeves in the October budget.
Donald Trump has revealed a list of more nations set to face delayed ‘liberation day’ tariffs from 1 August.
He has threatened tariffs of 30% on Algeria, 25% on Brunei, 30% on Iraq, 30% on Libya, 25% on Moldova and 20% on the Philippines. Sri Lanka was later told it faced a 30% duty.
Letters setting out the planned rates – and warning against retaliation – are being sent to the leaders of each country.
They were the latest to be informed of the president‘s plans after Japan and South Korea were among the first 14 nations to be told of the rates they must pay on their general exports to the US from 1 August.
The duties are on top of sectoral tariffs, covering areas such as steel and cars, already in place.
Mr Trump further warned, on Tuesday, that a 50% tariff rate on all copper imports to the US was looming.
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He has also threatened a 200% rate on pharmaceuticals and is also expected to take aim at all imports of semiconductors too.
The European Union, America’s largest trading partner in combined trade, services and investment, is expected to get a letter within the next 48 hours unless further progress is made in continuing talks.
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The bloc, which Mr Trump has previously claimed was created to “screw” the US, has been in negotiations with US officials for weeks and working to agree a UK-style truce by the end of the month.
The EU has retaliatory tariffs ready to deploy from 14 July but it is widely expected to delay them until such time that any heightened US duties are imposed.
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It remains hopeful of a deal in the coming days but European Commission president Ursula von der Leyen told the European Parliament: “We stick to our principles, we defend our interests, we continue to work in good faith, and we get ready for all scenarios.”
While the UK’s so-called deal with Mr Trump is now in force, it remains unclear whether steelmakers will have to pay a 50% tariff rate, deployed by the US against the rest of the world, as some final details on an exemption are yet to be worked out.
The value of its shares has risen by 409,825% since its market debut in 1999.
Its status has been cemented thanks to the rush for AI technology – suffering several wobbles along the way – but nothing significant when you refer to the percentage rise of the past 26 years.
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The most recent pressures have come from the emergence of the low-cost chatbot DeepSeek and concerns for global AI demand as a result of Donald Trump’s trade war hitting growth.
Financial markets have been taking a more risk-on approach to the trade war since the delays to “liberation day” tariffs in April.
It’s explained by a market trend that’s become known as the TACO trade: Trump always chickens out.
Image: The milestone is reported by Sky’s US partner CNBC, seen on screens at the New York Stock Exchange. Pic: Reuters
It has helped US stock markets post new record highs in recent days.
The wave of optimism is down to the fact that the president is yet to follow through with the worst of his threatened tariffs on trading partners.
Corporations are also yet to report big hits to their earnings – a fact that is also propping up demand for shares.
If Mr Trump does go all-out in his trade war, as he has now threatened from 1 August, then that $4trn market value for Nvidia – and wider stock markets – could be short-lived, at least in the short term.
But market analysts believe Nvidia’s value has further to go.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said of its meteoric rise: “Once known for powering video games, NVIDIA has transformed into a foundational player in AI infrastructure.
“Its high-performance chips now drive everything from natural language processing to robotics, making them essential to training and deploying advanced AI models.
“Beyond hardware, its full-stack ecosystem – including software platforms and developer tools – helps companies scale AI quickly and efficiently. This end-to-end approach has positioned Nvidia as a cornerstone in a market where speed, scalability, and efficiency are critical.”
He added: “The key question is where it goes from here, and while it might seem strange for a company that’s just passed the $4trn mark, Nvidia still looks attractive.
“Growth is expected to slow, and it’s likely to lose some market share as competition and custom solutions ramp up. But trading at a relatively modest 32 times expected earnings, and over 50% top-line growth forecast this year, there’s still an attractive opportunity ahead.
“For investors, it remains a compelling way to gain exposure to the AI boom – not just as a participant, but as one of its architects.”