Tuesday 27 September 2022 08:23 AM Kwasi Kwarteng 'must rebuild trust with markets' about borrowing trends now

Tuesday 27 September 2022 08:23 AM Kwasi Kwarteng 'must rebuild trust with markets' about borrowing trends now
Tuesday 27 September 2022 08:23 AM Kwasi Kwarteng 'must rebuild trust with markets' about borrowing trends now

Tuesday 27 September 2022 08:23 AM Kwasi Kwarteng 'must rebuild trust with markets' about borrowing trends now

Kwasi Kwarteng is facing a battle to rebuild trust with markets over the scale of borrowing for his growth-boosting Budget after a torrid day for the Pound.

Sterling appears to have steadied somewhat after a rollercoaster ride in which it hit a new record low of just $1.0327. It then clawed back most of the ground but slumped again when the Bank of England stopped short of the emergency interest rate hike many had anticipated.

Even supporters of the government's approach have admitted that ministers could have done more to lay the ground for the extraordinary Budget package on Friday - when Mr Kwarteng declared he will borrow to slash taxes by £45billion, as well as for freezing energy bills. 

Amid Tory nerves, they urged Mr Kwarteng to tackle the worries of the market 'head-on' - with the Chancellor responding by promising to lay out new debt rules at a fiscal event on November 23, which will also feature independent figures from the OBR watchdog. 

However, it is far from the certain that the Bank of England will be able to hold off interest rate increases until its next meeting that month, and many now expect the headline rate to reach an eye-watering 6 per cent by next year. Mortgage providers have already started withdrawing some products amid the chaos, heaping more problems on households struggling with the cost-of-living crisis.

Sterling was sitting at around around $1.08 this morning, but economists have warned it could still fall to parity with the dollar this year for the first time. Gilt yields - the interest rate on the government's borrowing - have also spiked over recent days. 

Sterling appears to have steadied somewhat after a rollercoaster ride yesterday in which it hit a new record low of just $1.0327

Sterling appears to have steadied somewhat after a rollercoaster ride yesterday in which it hit a new record low of just $1.0327

Liz Truss

Kwasi Kwarteng

Liz Truss (left) and Kwasi Kwarteng (right) are facing a battle to rebuild trust with markets over the scale of borrowing for his growth-boosting Budget after a torrid day for the Pound

Banks pull mortgages amid market chaos 

Banks and building societies are withdrawing some of their mortgages from sale after the Government's mini-budget on Friday sparked massive market turmoil.

Three lenders have so far withdrawn some of their products amid the uncertainty.

Virgin Money said: 'Given market conditions we have temporarily withdrawn Virgin Money mortgage products for new business customers.

'Existing applications already submitted will be processed as normal and we'll continue to offer our product transfer range for existing customers.

'We expect to launch a new product range later this week.'

Halifax also said it is withdrawing all mortgages that come with a fee.

'As a result of significant changes in mortgage market pricing we've seen over recent weeks, we're making some changes to our product range,' it said.

'There is no change to product rates, and we continue to offer fee-free options for borrowers at all product terms and LTV levels, but we've temporarily removed products that come with a fee.'

The Skipton Building Society said it had also withdrawn its offers for new customers, in order to 'reprice' given the market movement in recent days.

A spokeswoman said: 'We have temporarily withdrawn our mortgage range

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