He was one of only three members to vote for a rise in July, while the majority, including governor Andrew Bailey, held the rate at 3.75%. Bailey has taken a more cautious tone, saying the Bank’s position remains reasonable given the unpredictability of the conflict.
Lenders had already started moving
Ahead of that vote, major UK lenders had begun raising mortgage rates to catch up with recent increases in swap rates, according to analysis from Moneyfactscompare.co.uk.
HSBC and NatWest were the first of the biggest banks to reprice since the start of September, with further lenders expected to follow in the coming days.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said pricing margins are under pressure and that adjustment was “somewhat inevitable.”
Gilt yields add to the funding pressure
Springall also pointed to the UK 10-year gilt yield, which has risen further above 5% to its highest level in 18 years, adding pressure to the wholesale funding costs that underpin fixed rate mortgage pricing. She linked the move to a global bond sell-off.