Banks, including Barclays, HSBC, and NatWest, are increasing costs on fixed-rate mortgage deals. Barclays raised rates for the second time in a week by 0.1% across various products.

Similarly, NatWest will increase rates on some two and five-year deals for existing customers by 0.1%. HSBC also plans to hike some rates this week, though specifics were not disclosed.

Leeds Building Society is increasing the fixed rate on selected products by up to 0.2%, and Co-op is raising rates on some deals by up to 0.41% but reducing others by 0.07%. The average two-year fixed mortgage rate now stands at 5.82%, and the five-year rate at 5.40%.

These changes reflect lenders responding to altered expectations around the Bank of England's (BoE) benchmark rate, which influences borrowing costs and currently sits at 5.25%. Originally, analysts expected rate cuts from June due to a drop in inflation rates. However, recent data indicates a slower-than-expected decrease in inflation, leading to a shift in predictions.

Additionally, global markets have been impacted by the persistence of higher inflation in the US, which has delayed the Federal Reserve's expected rate cuts.

This has influenced UK mortgage costs, highlighting the interconnected nature of international finance. Chancellor, Jeremy Hunt, emphasised the influence of US economic developments on the UK at the International Monetary Fund Spring Meeting when he said:

"What happens in the US has a knock-on impact in the UK".

Get in touch to discuss your finances.