Mortgage borrowers urged to 'move quickly' to secure cheap deal amid post-Budget unease

Borrowers keen to bag a cheap mortgage have been urged to “move quickly” in the wake of the .

The is still expected to announce a rate cut next week, but another in December is now seen as far less likely. Experts have also scaled back forecasts for the number of rate cuts next year.

It comes amid predictions that the government’s hike in employers’ national insurance will drive up inflation as firms raise prices to compensate. The Office for Budget Responsibility now expects inflation will average 2.6% next year, compared with a previous 1.5% forecast. Jitters over Chancellor ’ huge £70billion spending plans - funded by £30billion of borrowing and £40billion of tax rises - continue to unnerve investors.

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David Hollingworth, associate director at broker L&C Mortgages, said: “It’s confusing times for mortgage borrowers when expectation is for a base rate cut next week but fixed rates look set to rise. If market rates remain at current levels, it looks inevitable that more lenders will have to rethink their rates.

“This isn’t the radical spike in rates that have blighted mortgage rates in the last couple of years. But if funding costs don’t ease, the sub 4% 5-year fixed rates that we’ve become used to in recent months could be under threat.

“Borrowers currently considering a fixed rate option should move quickly to secure a deal as we’re seeing some rates withdraw with very little notice.”

Andrew Goodwin, Chief UK economist at Oxford Economics, said he thought a cut next week was a “done deal”, but that another one in December “is a coin toss”.

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