UK Homeowners and Renters Face Huge Income Shock as Interest Rates Rise
The Barclays boss, Venkat, has warned that UK homeowners and renters are facing a "huge income shock" as a result of rising interest rates, which are taking a chunk of between 28-30% out of their income.
He predicts that most people will begin to feel the impact of higher rates when their current deal expires by the end of next year.
The Bank of England has raised interest rates 12 times since December 2021 in an attempt to keep inflation under control, but the typical UK mortgage is a two-year fixed-rate deal.
Around 85% of all mortgages are fixed-rate, according to the Bank of England.
It is estimated that around 1.3 million households will reach the end of their deals this year and face a rise of up to £200 per month, based on current rates.
The Bank of England has raised interest rates 12 times since December 2021 in an attempt to keep price rises, or inflation, under control.
Data released on Wednesday shows inflation slowed to 8.7% in the year to April but remains higher than some economists predicted.
It has prompted expectations of a further increase in borrowing costs when the Bank of England's rate-setting Monetary Policy Committee (MPC) meets in June.
The Bank of England has raised interest rates 12 times since December 2021 in an attempt to keep inflation under control, but the typical UK mortgage is a two-year fixed-rate deal.
Around 85% of all mortgages are fixed-rate, according to the Bank of England.
It is estimated that around 1.3 million households will reach the end of their deals this year and face a rise of up to £200 per month, based on current rates.
The Bank of England has raised interest rates 12 times since December 2021 in an attempt to keep price rises, or inflation, under control.
Data released on Wednesday shows inflation slowed to 8.7% in the year to April but remains higher than some economists predicted.
It has prompted expectations of a further increase in borrowing costs when the Bank of England's rate-setting Monetary Policy Committee (MPC) meets in June.
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