Labour win will add £65 to the cost of mortgage, says economist
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A hung Parliament or Labour win at the general election could add £65 to the cost of the average mortgage, a Citigroup economist has claimed.
The Metro reports that in an analyst’s note, Citigroup economist Michael Saunders says: “Unless we get a Conservative Government with a clear majority, we think gilt yields will have to rise to about 4.75 per cent and higher if inflation remains a threat.”
As the cost of mortgage funding is linked to gilt yields, this would mean that if rates went up by one per cent, it could lead to a £780 annual increase in the cost of an average £112,000 mortgage or £65 monthly increase.
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Readers' comments (3)
Anonymous | 5 Mar 2010 3:16 pm
..then maybe savers' rates could go up - hurrah. Low rates are great for the indebted but people forget the (many more) savers getting very little on deposits for the last year or so...
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Sir Malcs | 5 Mar 2010 4:26 pm
Savers should be getting their wallet out and spending to help stimulate the economy.
Sitting at home crying that the interest rate is low isn't going to solve anything - spend spend spend!!!
:)
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Anonymous | 5 Mar 2010 4:45 pm
Could Mr Suanders be a Tory voter one wonders, I always thought it was the public who decided the nature of the goverment, not the city!!- sorry I must be living in a different dimension
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