The severe economic fallout of the government's hugely controversial budget plan will add hundreds to the mortgage payments of Merseyside homeowners, according to new figures.
New analysis from Labour suggests people across Merseyside and the north west will face an average mortgage hike of £374 each month following the economic chaos that has stemmed from Chancellor Kwasi Kwarteng's package of measures.
Bank of England data suggests an average buyer taking out a two-year fixed mortgage in the third quarter of 2020 faced an interest rate of about 1.6% and monthly repayments of £794. Should interest rates reach 5%, those repayments would increase to £1,076. They would top £1,168 if interest rates hit six per cent.
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This new data comes after the government was criticised for handing billions of pounds of tax cuts to high earners and lifting the cap on bankers' bonuses. Interest rates have continued to rise despite the government performing a major u-turn over one element of its plan - a move to cut the 45p top rate of tax.
Keir Starmer MP, Leader of the Labour Party said: “Eye-watering mortgage increases of up to £374 will cause homeowners across the North West sleepless nights – and the Tory Government is entirely to blame.
“Liz Truss and Kwasi Kwarteng crashed the economy with their attempts to hand enormous, unfunded tax cuts to those who least need it. The humiliating U-turn they were forced into came too late - the damage had been done. Now people in the North West are suffering the consequences. This was a crisis made in Downing Street but paid by working people.
“The Prime Minister must reverse her kamikaze budget, including her totally unfunded £17 billion corporation tax giveaway to the biggest companies. The burden of the Tories’ fantasy economics should not fall on working people.”
Following this up on Sky News today, shadow Levelling Up Secretary Lisa Nandy said: "The government has got to reverse the mini-budget which is what has caused huge instability in the markets. It’s meant mortgage products have been withdrawn and mortgage lenders have been pricing in higher interest rates.”
Labour’s analysis comes the day after Prime Minister Liz Truss named the party as one member of an ‘anti-growth coalition’ at her speech to the Conservative party conference in Birmingham.
You can calculate how much your mortgage payments could be using our helpful tool below.
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