Banks and building societies in the UK have withdrawn several mortgage products after market volatility raised concerns of further interest rate rises.
The pound fell to a record low against the US dollar on Monday after Chancellor Kwasi Kwarteng announced a £45bn package of tax cuts in last week’s mini-budget and said he planned to cut taxes further.
A weak pound makes imports more expensive and risks fuelling price rises at a time when UK inflation is already at a 40-year high.
Traders now expect interest rates to more than double by next spring to 5.8%, from their current level of 2.25%, to help curb inflation.
Following speculation that it might intervene this week, the Bank of England said it was closely monitoring developments in the financial markets and “will not hesitate to change interest rates by as much as needed”. However, a decision is not expected until the next meeting of the Monetary Policy Committee on 3 November.
More than 350 mortgage products have been withdrawn from the market since Friday, according to financial information firm Moneyfacts.
As of Tuesday morning a total of 3,569 residential mortgage products were available, compared with 3,961 on Friday when the mini-budget was announced
Virgin Money and Skipton Building Society are among the lenders that have withdrawn mortgage products for new customers, but said submitted applications would still be processed.
