From This is Money:
Figures show that the average rate on a five-year fixed mortgage rose by 0.63 percentage points to 5.56% in June – the biggest monthly rise since records began 14 years ago.
At the same time, the average rate on a £10,000 personal loan rose by 0.87 percentage points to 10.32 per cent, also the largest-ever monthly rise.
However, the Bank of England held the base rate at 0.5% yesterday.
It has remained at this level since the beginning of March and analysts believe it will stay at this record low into 2010.
The Bank’s data showed rates for mortgages, loans and overdrafts have increased despite the injection of huge sums into the economy in an attempt to encourage lending and reduce borrowing costs.
The rises have led to criticisms that lenders are simply fattening up their credit margins to boost profits.
Brokers said the rates had initially gone up because of an increase in wholesale funding costs a month ago. But these costs have now come back down, while the rates…
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