Bank of England base rate stays the same... but mortgage deals STILL get worse!

It’s bad news for borrowers and savers alike:

MORTGAGE costs are still soaring even though the Bank of England voted against an interest rate rise yesterday.

The decision to keep rates at a record-low 0.1 per cent offered a reprieve to the 2million homeowners with variable rate mortgages who will not face immediate bill increases.

But experts warned it is only a matter of time before rates do go up – with a hike still possible before Christmas.

In the week since the Budget, lenders have pulled their cheapest fixed deals in anticipation of an upwards march. And just hours before the Bank’s vote, they continued to hike their rates.

Banks and building societies have announced 42 different sets of rate changes with hundreds of deals now more expensive, according to mortgage broker L&C. Some have moved up rates more than once, with loans priced below 1 per cent disappearing fast.

Higher mortgage costs will be a major blow for struggling households whose budgets are already being squeezed by soaring prices and looming tax hikes.

But for millions of savers who have suffered more than a decade of rock-bottom rates, the decision to keep the base rate at 0.1 per cent came as an enormous disappointment.

At present, there is not a single account that protects savers’ cash against rising prices.

There is £965.7billion in easy access accounts earning an average of 0.1 per cent, according to the Bank of England.

With inflation predicted to hit 5 per cent next year, savers stand to lose out on £47.3billion of spending power.

David Hollingworth, of L&C, said: ‘There is little room for complacency as this may simply be a postponement of what the markets see as inevitable. The potential for a rate rise should act as a warning to the borrowers on variable rates.’

Meanwhile, some of the largest lenders hiked their rates just hours before the Bank of

England’s vote. HSBC raised the cost of dozens of mortgage deals – the second time it has done so in a week.

Britain’s biggest building society Nationwide withdrew all its tracker mortgages, which follow Bank of England base rate changes, and hiked rates on other deals by up to 0.35 percentage points.

NatWest and TSB brought in rises of up to 0.15 and 0.35 respectively, while Skipton

Building Society said it was pulling all of its three-year fixed-rate deals. Leeds Building Society also revealed rate hikes for some borrowers by up to 0.15 percentage points.

There are now just 19 deals priced below 1 per cent, down from 131 less than a month ago, according to data analysts Moneyfacts. Experts added these remaining few would not last long with sub-1 per cent five-year deals already gone.

Around a million homeowners on their lender’s standard variable rate, typically around 3.59 per cent, are being urged to switch to a cheaper deal. If base rate rose to 0.25 per cent, it would push up the cost of a typical £150,000 home loan by an extra £11.66 a month or £139.92 a year, according to L&C. A rise to 1 per cent would hike bills by £71.27 a month or £855.24 a year.

The Bank of England’s Monetary Policy Committee yesterday signalled households should brace for interest rate rises in the ‘coming months’.

Only 6 per cent of workers on furlough left their jobs when the scheme ended on September 30 – and half of them did so voluntarily.

Figures from the ONS show 3 per cent of the 1.14million on the scheme were made redundant and the other 3 per cent left of their own accord.

‘Postponement of the inevitable’