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Around half the UK’s mortgage holders face paying higher rates over the next three years, the Bank of England has warned, while sounding alarm over the potential impact of Donald Trump’s looming return to the White House.

Its latest financial stability report – released twice a year – showed 4.4 million homes were set to refinance at higher rates.

But it added that around a quarter of borrowers were expected to benefit from lower rates, based on current market pricing, as rates have dropped from the highs seen in 2023.

The central bank’s financial policy committee also identified a risk ahead – that higher trade barriers could hit global growth.

While it did not directly reference Donald Trump’s warning about raising US trade tariffs when he becomes president again in January, the report said such barriers would feed uncertainty about inflation, potentially causing volatility in financial markets.

“A reduction in the degree of international policy cooperation could hinder progress by authorities in improving
the resilience of the financial system and its ability to absorb future shocks,” the report said.

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Trump’s threat of tariffs explained

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Asked at a news conference whether the Bank was specifically referring to Mr Trump’s trade tariff warnings, governor Andrew Bailey cautioned that it was “the doing that counts”.

The report spoke of raised global risks more generally and said that any sharp financial market correction could raise credit costs.

When it came to the UK specifically, Mr Bailey also told reporters he saw no trade-off between financial stability and economic growth.

That was after chancellor Rachel Reeves said regulators had gone too far in discouraging risk-taking.

The Bank said its latest stress tests of the banking system had raised no concerns.

It also said that financial stress among households and businesses remained resilient in the face of the price shocks the economy had experienced since the end of the COVID pandemic.

But it signalled that the battle against inflation would continue to drag on.

The report was released against a backdrop of weak expectations for a third interest rate cut this year when the Bank’s rate-setting committee meets in a few weeks’ time.

Just 13% of financial market participants expect a reduction to 4.5% on 19 December.

That is because all the data the Bank relies on to judge whether a cut to borrowing costs is appropriate contains red flags.

The headline measure of inflation is back above the monetary policy committee’s 2% target at 2.3%, following a sharp leap from 1.7% in October due to rising energy costs.

Some other stubborn elements include prices for services.

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Inflation rises beyond forecast

Another stumbling block has come from the pace of wage growth which the Bank fears will stoke demand in the economy, and price growth as a result.

There have been no dissenters on the future path for rates, if recent remarks by Bank rate-setters are anything to go by.

All have spoken of the need for a “gradual” approach.

That does not bode well for millions of new borrowers – and those whose loans are tied to Bank rates – though deals for things like fixed-rate mortgages have eased in line with the two interest rate cuts announced by the Bank to date in 2024.

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Separate figures released earlier in the morning by the Bank suggested confidence remained that borrowing costs were on a downward path, however, as mortgage approvals and lending rose in October.

The number of mortgages approved was at its highest level since August 2022, the data showed.

However, a slight drop in demand for consumer credit and higher savings rates also suggested continued caution over the slowing economic outlook.

It is further evidence of caution among households in the run-up to the budget which, the government had warned, would be “tough”.

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How many prisoners are released by mistake?

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How many prisoners are released by mistake?

A manhunt for a second and third prisoner who were released in error has put further pressure on Justice Secretary David Lammy.

Last month Hadush Gerberslasie Kebatu, who was serving a 12-month prison sentence for sexual assault, was released in error when he should have been deported.

The Ethiopian national, who came to the UK on a small boat in the summer, spent roughly 48 hours at large before being apprehended in north London and deported.

But it emerged on Wednesday that within days of Kebatu’s mistaken release from HMP Chelmsford, HMP Wandsworth also mistakenly released prisoner Brahim Kaddour-Cherif.

The Metropolitan Police confirmed to Sky News: “Shortly after 1pm on Tuesday 4 November, the Met was informed by the Prison Service that a prisoner had been released in error from HMP Wandsworth on Wednesday 29 October.

“The prisoner is a 24-year-old Algerian man.

“Officers are carrying out urgent enquiries in an effort to locate him and return him to custody.”

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The same day Surrey Police put out a public appeal to locate fraudster William Smith, 35, who was also released in error from HMP Wandsworth on 3 November. He had been sentenced to 45 months in prison that day.

Mr Lammy, who was recently appointed justice secretary, is under renewed political pressure.

Hadush Kebatu, jailed for two sexual assaults in Epping. Pic: Essex Police / PA
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Hadush Kebatu, jailed for two sexual assaults in Epping. Pic: Essex Police / PA

How many prisoners are released in error?

According to government statistics published in July, 262 prisoners were released in error in the 12 months to March 2025 – a 128% increase from 115 the previous year.

The report states: “Of the 262 releases in error, 233 of these releases in error occurred from prison establishments, while 29 were released in error at the courts.

“Releases in error from establishments could also be a result of errors by the court.”

This is out of a total prison population across England and Wales of roughly 86,000.

Sky News has contacted the HM Prison & Probation Service to know how many of the 262 prisoners have since been found and returned to custody.

In September 2024, Sky News reported how dozens of people released from jail under the government’s emergency prison scheme were freed by mistake.

The Labour government said it was forced to release hundreds of inmates early because prisons were at capacity.

William Fernandez. Pic: PA
Image:
William Fernandez. Pic: PA

Kebatu was due to be deported when he was mistakenly released from HMP Chelmsford.

Previous high-profile manhunts

William Fernandez, who was awaiting trial for sexual assault, was released from HMP Wormwood by error in March 2021. He then went on to rape a 16-year-old girl and sexually assault a young woman.

Joseph McCann. Pic: Police handout
Image:
Joseph McCann. Pic: Police handout

In December 2019, the prisons and probation service “apologised unreservedly” after serial rapist Joseph McCann was freed to commit a series of sex attacks on women and children.

In July 2017, an inmate who was released from prison just months into a nine-year sentence due to a “clerical error” was arrested after weeks on the run.

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Small boat migrant sent back to France for second time in less than two months

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Small boat migrant sent back to France for second time in less than two months

A man who arrived on a small boat has been sent back to France for the second time in less than two months.

The Iranian man came to the UK on a small boat on 6 August and was initially sent back to France on 19 September, before returning to the UK on a small boat on 18 October.

He has been flown back again as part of the latest tranche of 19 returnees under the “one in, one out” agreement with France.

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The Iranian man told The Guardian he had been a victim of modern slavery at the hands of people smugglers in northern France.

As part of the one in, one out agreement, which came into play in August, 94 migrants who came to the UK illegally on small boats have now been removed.

In return, a total of 57 approved asylum seekers have been brought to the UK.

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The man came to the UK twice on a small boat. File pic
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The man came to the UK twice on a small boat. File pic

Although the UK has sent back more migrants than it has accepted, the two countries have committed to exchange an equal number of people in each direction.

The end of October saw more migrants having crossed the Channel in 2025 than the entirety of 2024.

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Home Secretary Shabana Mahmood said: “Anyone looking to return to the UK after being removed under the UK-France agreement is wasting their time and money.

“This individual was detected by biometrics and detained instantly. His case was expedited, and now he has been removed again.

“My message is clear: if you try to return to the UK you will be sent back. I will do whatever it takes to scale up removals of illegal migrants and secure our borders.”

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Major incident declared in parts of Wales after flooding triggers hundreds of calls

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Major incident declared in parts of Wales after flooding triggers hundreds of calls

Fire crews have been tackling a major incident after flooding hit parts of southwest Wales overnight, with people trapped in their homes and vehicles.

Joint Fire Control (JFC), which includes South Wales Fire and Rescue Service, received more than 450 calls within a 12-hour period, mainly in Carmarthenshire, according to Mid and West Wales Fire and Rescue Service (MAWWFRS).

Forty-eight people were rescued from a care home, more than 40 people were helped to safety from flooded homes, three people were rescued from a vehicle trapped in fast-flowing water, and more than 30 dogs were saved from flood-affected kennels at a shelter.

A major incident was declared after flooding at a retirement complex in Whitland in the early hours of Wednesday. At 1.35am, crews were deployed to rescue 48 people using “rescue sleds and water rescue equipment,” MAWWFRS said in a statement.

Pic: MAWWFRS
Image:
Pic: MAWWFRS

Three people were trapped in a vehicle in fast-flowing water. Pic: MAWWFRS
Image:
Three people were trapped in a vehicle in fast-flowing water. Pic: MAWWFRS

Earlier on Tuesday, in the remote village of Ffarmers, fire teams rescued three people and their two dogs who were stuck in a vehicle situated in fast-flowing water.

Fire chiefs said crews used extension ladders to reach the vehicle.

Two further incidents on Tuesday evening involved people being rescued from flooded properties in Ferryside.

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Around 42 more people were rescued in nearby St Clears, where about 20 domestic and commercial properties were flooded.

Flood warnings and alerts have been in force across Wales. Pic: Natural Resources Wales
Image:
Flood warnings and alerts have been in force across Wales. Pic: Natural Resources Wales

Later the same evening, crews were involved in an operation at Glanrhyd Dog Sanctuary, Kidwelly. Boats were used to evacuated dogs from a shelter which was ruined in the floods.

Owner Alison Clark told Sky News she was “broken beyond belief”.

Crews transported animals from Glanrhyd Dog Sanctuary, Kidwelly, to safety. Pic: MAWWFRS
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Crews transported animals from Glanrhyd Dog Sanctuary, Kidwelly, to safety. Pic: MAWWFRS

All the dogs were rescued. Pic: MAWWFRS
Image:
All the dogs were rescued. Pic: MAWWFRS

“It’s devastating. Everything ruined or lost in the current. All white goods… freezers etc along with dog food, bedding and leads etc.

“We spent 80k on this move to make the sanctuary one of the best and now it is ruined.

“I’m broken beyond belief. My only saving grace is that I kept every dog alive.”

Among the rivers placed on flood warning – where flooding is expected – were the River Towy around Camarthen and between Llandeilo and Abergwili, the River Ritec at Tenby, the River Cynin at St Clears, the River Taf at Whitland and the River Teifi at Llechryd and Cenarth.

Carmarthenshire County Council said a rest centre has been set up in Carmarthen Leisure Centre for those suffering the “severe impact” of flooding in the Whitland and St Clears areas.

Seven schools were closed on Wednesday in the county and the council also confirmed multiple road closures were in place due to flooding or road conditions.

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Craig Flannery, Assistant Chief Fire Officer at MAWWFRS, said the rescues were “prolonged and challenging”.

“I have personally witnessed the dedication and professionalism of our staff dealing with multiple calls over a prolonged period, as well as the courageous efforts of our operational crews responding to these incidents across our Service area,” he said.

“Our crews have been truly exceptional in assisting and protecting our communities.

“We are also extremely grateful to all partner agencies who have assisted in responding to incidents during a prolonged and challenging period.”

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