Is Halloween already here for the financial and mortgage markets?
(Picture: CCO/pxhere.com)So the Government has blinked yet again?
The Office for Budget Responsibility (OBR) will now publish its forecasts on Halloween, more than three weeks ahead of its original 23 November planned date.
They are unlikely to serve up many treats for the Government but at least they give the financial markets the information they need to price gilts and sterling.
At the moment they are largely flying blind, which goes some way to explaining the enormous “emerging markets-style” volatility in Britain’s currency and its traded debt.
The OBR will show that is little chance of “growth, growth, growth” this side of an election and in addition the public finances will be under enormous strain, particularly if, as now seems inevitable, Liz Truss and Kwasi Kwarteng bow to political reality and uprate working age benefits in line with inflation.
Meanwhile market mortgage rates continue to rise remorselessly as the fall out from the mini Budget continues to trash million of voters’ personal finances.
Today, Moneyfacts reported that two year fixes are averaging 6.31%, the highest since November 2008, while five year deals are at 6.19% the dearest since November 2009.
Every day thousands of homeowners reach the end of their fixed deals and are having to accept jolting hits to their household budgets.
Millions more are feeling “fix fear” as they look ahead to the moment when they have to remortgate and are already cutting back on spending in anticipation.
The OBR will spell out the hard macro numbers on October 31 but long before that, at the micro level of families and small business, the harsh reality is already all too apparent.
