Mortgage rates reach 15-year high

It surpassed the peak of 6.65%, seen during the aftermath of Liz Truss’ mini-Budget in October 2022, and is now the highest since the financial crisis.

Looking at official employment data from the ONS which shows the labour market has tightened, resulting in employers increasing wages in an effort to attract and retain staff, traders are betting on the Bank of England raising interest rates.

Neil Carberry, chief executive of REC, said: “The labour market has softened since last summer, but overall demand remains high. This shows underlying need to hire among businesses despite their concerns about inflation, interest rates and weak economic growth. The ongoing demand for temps shows this in action. Our temporary jobs market enables companies to grow even in this period of economic uncertainty and offers job seekers the chance to get a foot in the door, earn a bit more, learn new skills and control of their work/life balance.”

The Telegraph reported that traders are betting that the central bank will raise borrowing costs to a 25-year high by early next year, which could push average mortgage rates past seven percent.

The average five-year fixed deal remains somewhat lower at 6.17pc, compared with a peak of 6.51pc in October.