Shaw said at some point, the Bank of England will need to “get a grip” on the UK economy. Base rate rises are used to cool inflation, which is tipped for 10 per cent this year, 8 percentage points above the central bank’s target.
The UK economy returned to growth in May, 0.4 percentage points above expectations. But inflation still sat at a 40-year high of 9.1 per cent.
“The next base rate rise will be half a per cent, I’d bet on that. The market sentiment is that ‘a quarter of a per cent is doing sod all’,” said Shaw.
Product choice fallen ‘notably’
Choice of mortgage products fell “notably” this month, falling from 4,987 to 4,556 between June and July, according to Moneyfacts.
Finance expert at Moneyfacts, Eleanor Williams, said the dip in mortgage deals was a result of mortgage lenders continuing to revise their ranges in the face of ongoing economic uncertainty.
“We have seen some providers pull selected products, while others have withdrawn whole sectors of, or indeed their entire ranges, from the market temporarily,” she said.
“Compared to last month, total availability has reduced by a notable 431 deals to leave 4,556 mortgage products on offer to borrowers this month.
“This is just 44 more deals than were available this time last year.”
With product ranges condensing, Williams said average fixed rates have continued on an upwards trajectory, with two and five-year fixed averages at all loan-to-value (LTV) tiers rising this month.
ruby.hinchliffe@ft.com
