UK Mortgage Rates Soar to Five-Month High Amid Rate Hike Fears

UK mortgage rates have hit their highest levels in around five months amid growing fears of an interest rate hike by the Bank of England. The average two-year fixed residential mortgage rate rose to 5.67% on Friday, its highest level since June, according to data from Moneyfacts.

The typical five-year fixed rate reached 5.72%, its highest level since April. This increase comes as financial markets reassess the outlook for UK interest rates following renewed inflationary pressure from energy markets and stronger-than-expected domestic economic growth.

Oil prices have surged amid escalating tensions in the Middle East, increasing concerns that higher energy costs could feed through into broader inflation and make it harder for the Bank of England to keep price pressures under control. Adam French, head of consumer finance at Moneyfacts, said borrowers are facing another wave of mortgage repricing, with around 20 lenders increasing rates this week.