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Daily Mirror
Daily Mirror
Business
Sam Barker

Join us LIVE as experts explain future of mortgages and savings as interest rates to rise

Homeowners, savers and those saving into pensions have faced turmoil this week after a series of financial announcements.

But what does all this mean for your money - and what could happen next?

Mirror business editor Graham Hiscott will be joined by Mirror Money reporter Sam Barker today at 1pm on a Mirror Facebook Live to run through everything you need to know.

You can ask us a question during the live broadcast, or drop us a line now at: mirror.money.saving@mirror.co.uk.

It comes after the Bank of England yesterday unveiled major steps to help avoid economic turmoil today after the Mini-Budget.

The BoE said it has started buying up bonds in an emergency move to avoid a “material risk to UK financial stability”.

The pound fell to an all-time low against the US dollar on Monday - sparking a wave of mortgage lenders pulling or tweaking hundreds of deals.

Join us tomorrow (September 29) at 1pm live on the Daily Mirror Facebook page

Markets were spooked, while families were warned that mortgage bills could rise by thousands of pounds a year after it was warned interest rates could hit 6%.

Meanwhile, economists have warned house prices could fall by 10% to 15%. Pension funds also faced "mass insolvencies" without action from the BoE.

The central bank has paused its plans to sell government bonds, and instead will do the opposite by starting to buy up old ones.

The aim is to calm what the Bank of England is calling “dysfunctional markets”.

When central banks buy their country's own bonds - a sort of debt - interest rates tend to fall.

That matters to all Brits because these interest rates are built in to the price of things like mortgages and loans.

A Bank of England statement today said: "As the Governor said in his statement on Monday, the Bank is monitoring developments in financial markets very closely in light of the significant repricing of UK and global financial assets.

"This repricing has become more significant in the past day - and it is particularly affecting long-dated UK government debt.

"Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability.

"This would lead to an unwarranted tightening of financing conditions and a reduction of the flow of credit to the real economy."

The Bank of England is trying to avoid inflation rising even further - a hammer blow to UK households who are grappling with the rising cost of living - by upping its base rate.

Experts think the Bank of England could raise base rate from 2.25% to 6% next year, as the central bank battles against high inflation - currently 10.1%.

A top Bank of England official warned millions of borrowers to brace themselves for a “significant” rate hike.

Huw Pill, the Bank’s chief economist, also admitted: “We don’t know what the future holds. Not for the next few weeks, not for the next few days – or even perhaps not for the next few hours.”

But savers stand to benefit, as the Bank is also tackling inflation by putting up base rate.

That is factored in to the price paid by savings firms in interest.

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