Mortgage chaos: 41% of deals pulled since mini-budget
Forty-one per cent of mortgage products have been taken off the market since Kwasi Kwarteng’s mini-budget last Friday, which sparked panic in financial markets, and expectations of a jump in the Bank of England’s base rate to 6% by next summer.
A further 321 products were withdrawn overnight, on top of the record 935 pulled the day before, according to Moneyfacts.
Between Friday and today a total of 1,621 residential mortgage products have been withdrawn leaving 2,340 on sale today.
According to Defaqto, more than 20 providers have withdrawn their entire fixed rate mortgage range.
Katie Brain of Defaqto says:
What products are left are changing at a rapid pace, lenders seem to be really unsure of what to offer and what price with so many changes in the money markets at the moment.
Consumer finance expert Martin Lewis has tweeted:
For every £100,000 of mortgage, you’ll pay roughly £600 a year more for each 1% pt interest rate rise.
Top fixes today are 3%ish more than a year ago (so £1,800 per £100,000).
If UK rates rise to 6%, as some predict mortgages’d likely rise more than another 3% again
BUT…
— Martin Lewis (@MartinSLewis) September 28, 2022
That assumes people will be accepted for the top fixes.
At those rates of interest though many more will likely fail the affordability checks – which means likely sticking with their own lenders (poss costlier) fix or moving onto standard variable rates, which are even higher.
— Martin Lewis (@MartinSLewis) September 28, 2022
Liz Truss was asked about mortgages this morning.
An awkward moment.
BBC Stoke’s @johnacres48 asks Liz Truss about mortgages dwarfing any savings her govt may have made people.
“You’ve done this yourself. This isn’t to do with external forces. This is about your mini budget and what it’s done to the economy”.
Truss: “…….” https://t.co/xiw7nRSsCC
— Pippa Crerar (@PippaCrerar) September 29, 2022
As a reminder:
Liz Truss, 25 July 2022, when warned by Rishi Sunak that her plans would make inflation worse and mortgage rates soar and lose them the next election:
‘I don’t believe in this negative, declinist language’
‘I have lots of economists that are backing my plans’ pic.twitter.com/pzSFYJoGbo
— Nadine Batchelor-Hunt (@nadinebh_) September 27, 2022
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Sorrell predicts bathtub recession in UK
Sir Martin Sorrell, founder and chairman of the media company S4 Capital, has predicted a “bathtub” shaped recession for the UK, with two difficult years in 2023 and 2024.
While he broadly welcomed the government’s growth strategy, he said the timing was wrong. He added that the corporation tax change (rather than rising to 25% from April 2023, the rate will remain at 19% for all firms) will not encourage investment, as long as there is heightened uncertainty over the UK’s future.
He told Sarah Montague on BBC radio 4’s World at One:
I don’t think rates of tax necessarily determine whether people invest, it’s certainty or uncertainty that makes you invest and the environment partly as a result of his statement on Friday and what he said over the weekend that there might be other unfunded tax reductions… has created even greater uncertainty. The issue of uncertainty is the real issue. Businesses will gust go on strike, they won’t invest until they see some clarity and we’re not going to get clarity for the next few weeks: no parliament, the Conservative party conference coming up…
This is just like the CEO and the CFO of a company coming up and saying: my revenue’s down, my costs are up and I have no specific plan for dealing with it, just leaving the shareholders in limbo. Unfortunately the shareholders only vote at times of elections so we have to wait for two years to see what the result of this is.
There will be falls in employment [in part] as a result of this [the mini-budget].
Asked about the likely shape of the recession, Sorrell said:
This is a bathtub [recession]. What we’re going to see 2023 and 2024 are difficult.
(Simon Johnson, former chief economist for the International Monetary Fund, has said that a U-shaped recession is like a bathtub: “You go in. You stay in. The sides are slippery. You know, maybe there’s some bumpy stuff in the bottom, but you don’t come out of the bathtub for a long time.”)
Sorrell went on to explain:
We’re in a difficult place. I don’t think we’ll see a recovery until the US presidential election in 2024. What I think the government has done here is gamble politically that by the general election in the UK in 2024 there will be some growth and that will bail them out. That is a heck of a gamble, particularly if you don’t have a fiscal plan.

Mortgage chaos: 41% of deals pulled since mini-budget
Forty-one per cent of mortgage products have been taken off the market since Kwasi Kwarteng’s mini-budget last Friday, which sparked panic in financial markets, and expectations of a jump in the Bank of England’s base rate to 6% by next summer.
A further 321 products were withdrawn overnight, on top of the record 935 pulled the day before, according to Moneyfacts.
Between Friday and today a total of 1,621 residential mortgage products have been withdrawn leaving 2,340 on sale today.
According to Defaqto, more than 20 providers have withdrawn their entire fixed rate mortgage range.
Katie Brain of Defaqto says:
What products are left are changing at a rapid pace, lenders seem to be really unsure of what to offer and what price with so many changes in the money markets at the moment.
Consumer finance expert Martin Lewis has tweeted:
For every £100,000 of mortgage, you’ll pay roughly £600 a year more for each 1% pt interest rate rise.
Top fixes today are 3%ish more than a year ago (so £1,800 per £100,000).
If UK rates rise to 6%, as some predict mortgages’d likely rise more than another 3% again
BUT…
— Martin Lewis (@MartinSLewis) September 28, 2022
That assumes people will be accepted for the top fixes.
At those rates of interest though many more will likely fail the affordability checks – which means likely sticking with their own lenders (poss costlier) fix or moving onto standard variable rates, which are even higher.
— Martin Lewis (@MartinSLewis) September 28, 2022
Liz Truss was asked about mortgages this morning.
An awkward moment.
BBC Stoke’s @johnacres48 asks Liz Truss about mortgages dwarfing any savings her govt may have made people.
“You’ve done this yourself. This isn’t to do with external forces. This is about your mini budget and what it’s done to the economy”.
Truss: “…….” https://t.co/xiw7nRSsCC
— Pippa Crerar (@PippaCrerar) September 29, 2022
As a reminder:
Liz Truss, 25 July 2022, when warned by Rishi Sunak that her plans would make inflation worse and mortgage rates soar and lose them the next election:
‘I don’t believe in this negative, declinist language’
‘I have lots of economists that are backing my plans’ pic.twitter.com/pzSFYJoGbo
— Nadine Batchelor-Hunt (@nadinebh_) September 27, 2022
Katie Brain, consumer banking expert at the financial information firm Defaqto, paints a dire picture in the mortgage market.
Within the space of a week we have seen some dramatic changes within the mortgage market. Nearly 3,000 mortgage products have been withdrawn, and over 20 providers have withdrawn their entire fixed rate mortgage range. What products are left are changing at a rapid pace, lenders seem to be really unsure of what to offer and what price with so many changes in the money markets at the moment.
Unfortunately for borrowers this means that the cost of a mortgage has increased, some providers increasing their fixed rates by more than 1.50%, when the base rate only increased by a fraction of that. However, interest rates on best buys for five-year fixed rates have not increased as much as the two-year fixed rates (yet), so if you are someone who is on a variable rate and are looking to fix, or coming to the end of a current deal then now is the time to act as interest rates are changing daily.
Many of the best rates are only available direct through a lender so it is worth contacting your existing lender, or bank you have other accounts with, to see what they have to offer. We can only hope that the situation calms down soon, so at least borrowers can seek alternative mortgage deals should they need to.
The availability of mortgage deals in the UK continues to worsen, as the expectation of a sharp rise in interest rates to 6% by next summer has prompted lenders to pull products, leading to chaos in the housing market. Here are the latest figures from Moneyfacts, quoted by Sky journalist Scott Beasley.
? Mortgage market – fully 40% of products now taken off the market since the ‘mini budget’
? Further 321 products withdrawn overnight
? On top of a record 935 withdrawn day before
So in just 6 days since Chancellor spoke:
? 1,621 products withdrawn-leaving 2,340 on sale
— Scott Beasley (@SkyScottBeasley) September 29, 2022
Another Twitter user said that the same mortgage that was 3.93% on Tuesday is 5.64% today with HSBC ( a five-year fee saver fix).
EU leaders to discuss ‘sabotage’ on Nord Stream next week
EU leaders will discuss next week what they regard as “sabotage” on the subsea Nord Stream gas pipelines, according to an EU official in Brussels.
He said:
The attack on strategic infrastructure means that the strategic infrastructure in the entire EU has to be protected.
This changes fundamentally the nature of the conflict as we have seen it so far, just like the mobilisation… and the possible annexation.
He was referring to Russia’s mobilising of 300,000 more troops for its war in Ukraine and expectations that president Vladimir Putin will annex eastern Ukrainian regions. He is expected to begin formally annexing 15% of Ukrainian territory on Friday to add four Ukrainian regions to Russia.
As gas continued to leak into the Baltic Sea for a fourth day since leaks were first discovered, it remained unclear who might be behind any deliberate attack on the pipelines.
Russia said the incidents looked like “an act of terrorism”, and that the leaks off the coasts of Denmark and Sweden occurred in territory that is “fully under the control” of US intelligence agencies.
Lindt wins chocolate bunny battle in Swiss court
Lindt & Sprüngli has won its battle against the German discount retailer Lidl, as Switzerland’s highest court ruled that the Swiss chocolatier’s famous Easter chocolate bunnies deserve protection from copycat products.
It has ordered Lidl to stop selling a similar bunny in Switzerland and to destroy its remaining stock.
The Federal Court said surveys submitted by Lindt showed its gold foil wrapped Easter bunny was well known to the public. It added that the two products were likely to be confused even though there are some differences.
Regarding the inventory destruction, the court said in a summary of its verdict:
Destruction is proportionate, especially as it does not necessarily mean that the chocolate as such would have to be destroyed.
The Swiss premium chocolate maker Lindt has fought many court battles over the years to protect the Easter bunny, one of its best-selling products. Germany’s federal court ruled last year that the gold tone of Lindt’s foil-wrapped bunny had trademark protection.

Porsche makes stock market debut
Porsche has made its stock market debut, one of the biggest public offerings in Europe ever.
Shares in the German sports car maker initially rose to €84 when they started trading in Frankfurt, valuing the company at €75bn. They were priced at the top end of the announced range, at €82.50, last night. The stock has since fallen back 7.9% to €62.50, amid a general share selloff. The Dax has fallen 1%, or 122 points, to 12,059.
The parent company Volkswagen is offering 911m shares, in a nod to Porsche’s famous 911 model.
Porsche hailed the beginning of a “new era” and chief executive Oliver Blume said:
Today, a big dream comes true for Porsche. Our increased degree of autonomy puts us in a very good position to implement our ambitious goals in the coming years.
Other companies are thought to be delaying going public because of the market turbulence.

Truss: Fracking must have community consent
Liz Truss said this morning that fracking will only be allowed to take place where a community has consented, and the government is working on the “detailed issues” about how support can be assessed.
She told BBC Radio Lancashire, which broadcasts in the region where fracking for shale gas was halted after earth tremors:
It’s very important for me as prime minister that any fracking has local community consent.
This month, her government controversially lifted a moratorium on fracking in England that had been in place since 2019, arguing that strengthening energy supply was an “absolute priority”. However, many experts, communities and MPs are strongly opposed to fracking.

In some good news, Spanish inflation fell in September to 9% from 10.5% in August, marking the second month of decline. These figures fuel hopes that the peak in inflation is now behind us, says ING economist Wouter Thierie.
He explains:
The decline in headline inflation is mainly due to base effects that are starting to kick in. We are now comparing energy prices to a period when energy prices started to rise in 2021. Increasing base effects will further weaken year-on-year comparisons. Encouragingly, core inflation has also cooled slightly, suggesting that the strength of second-round effects is waning, mitigating the risks of entering a wage-price spiral. In the coming months, the cooling demand will ease inflationary pressures as it will become more difficult for companies to pass on new price increases to the end customer.
Nevertheless, inflation will remain high until the end of the year. For the whole of 2022, we forecast inflation to come out around 9%. In 2023, inflation will gradually start to come down, reaching 4.5%. From 1 October, the Spanish government will reduce VAT on gas from 21% to 5% to soften the inflation shock. However, this will have only a marginal effect on the consumer prices index.
Despite the cooling trend, inflation remains historically high across the eurozone. Therefore, the current high inflation figures are unlikely to prompt the European Central Bank to ease its monetary tightening policy. Judging from ECB officials’ latest speeches, their first priority is to reduce inflation as soon as possible, rather than looking at inflation expectations or medium-term inflation. A 9% inflation rate is still well above the ECB’s 2% target. Even with an upcoming recession, we think it likely that the ECB will opt for another 75 basis point rate hike in November as well.
We’ll be getting inflation data from Germany at lunchtime. This morning, regional figures showed that inflation rose to a record 10.1% in the most populous state of North Rhine-Westphalia.
Confidence in the eurozone has fallen sharply, and by more than expected, among consumers and companies.
The European Commission’s monthly economic sentiment index fell to 93.7 points in September from a downwardly revised 97.3 in August.
Confidence worsened in all economic sectors, such as industry, services and retail, while inflation expectations rose. The decline was worst among manufacturers and consumers.
Household confidence fell to -28.8 points from -25, and consumers said they would scale back major purchases.
UK watchdog tells insurers to help customers in cost of living crisis
Britain’s financial watchdog has told insurers to help customers struggling to pay the premiums on their policies, which could leave them unprotected.
The Financial Conduct Authority said it was writing to the bosses of insurance firms to to make sure their customers are protected from unnecessary products or add-ons and unfair penalties. Where poor practice is found, the FCA vowed to quickly intervene to protect customers from harm.
The watchdog said firms can help customers in financial difficulty by:
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Reassessing customers’ needs
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Considering whether there are other products that better meet the customer’s needs
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Providing clear information to consumers about the additional cost of premium finance
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Working with customers to avoid the need to cancel necessary cover
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Waiving fees associated with adjusting a customer’s policy in line with the reassessments
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Considering whether cancellation fees should be removed for customers in financial difficulty
Sheldon Mills, executive director of onsumers and competition at the FCA, said:
Customers who are struggling with their finances should contact their providers as soon as possible. We encourage customers to continue to shop around to find the best deal.
Firms should not unfairly penalise them for any payment difficulties but instead work with them to find solutions.
Fourth leak found on Nord Stream pipelines
A fourth leak has been found on Nord Stream pipelines, Sweden’s coast guard says, the latest twist in Europe’s energy crisis.
The coast guard discovered a fourth gas leak on the damaged Nord Stream pipelines earlier this week, a coast guard spokesperson told the Svenska Dagbladet newspaper.
”Two of these four are in Sweden’s exclusive economic zone,” the spokesperson, Jenny Larsson, told the newspaper.
The two other holes are in the Danish exclusive economic zone, according to a translation of the report published by Reuters.
You can read more on our Russia-Ukraine war live blog with Martin Belam here.
The European Union suspects sabotage was behind the gas leaks on the subsea Russian pipelines to Europe and has promised a “robust” response to any intentional disruption of its energy infrastructure.