UK mortgage rates may double because of reckless fiscal policy and debt build-up.

This is a hedged ('may') prediction that UK mortgage rates would double because of reckless fiscal policy and debt build-up. Judge through the end of 2024. The test is whether typical UK mortgage rates reached at least twice their pre-2022 level. Measure with the Bank of England's quoted 2-year fixed rate (75% LTV) or the Moneyfacts average 2-year fixed rate, compared with late-2021 levels. Alternatively, compare rates on new or refinanced mortgages with the rates those borrowers were paying before they refinanced. TRUE: rates reached at least 2x the baseline, and UK fiscal policy or debt concerns (for example the September 2022 mini-budget) are documented as a contributing cause. MOSTLY TRUE: rates doubled, but contemporary analysis attributes the rise mainly to monetary tightening and gives fiscal policy only a minor role. MIXED: rates rose by 75–99%. MOSTLY FALSE: rates rose by 40–75%. FALSE: rates rose by less than 40%.

Set before the research began.

1. E1 Moneyfacts Year in Review 2023 - Mortgages Moneyfacts Group plc · 1 December 2023

   “The average rate for a two-year residential mortgage peaked at 6.86% on 26 July this year. This will have been a sobering prospect for those coming to the end of a two-year fix, when the average rate was just 2.52% on 26 July 2021.”

2. E2 Moneyfacts Year in Review 2023 - Mortgages Moneyfacts Group plc · 1 December 2023

   “Rates for 2022 peaked in the aftermath of the fiscal announcement at 6.65% on 20 October 2022, meaning two-year fixes went considerably higher than those this summer.”

3. E3 Monetary Policy Summary and minutes of the Monetary Policy Committee meeting ending on 2 November 2022 Bank of England · 3 November 2022

   “According to market participants, the rise in UK rates since August had reflected a number of factors, including the impact of recent fiscal announcements on UK demand, a higher premium required to invest in UK assets, data news on the degree of near-term domestic inflationary pressures, global factors, market illiquidity, and perceptions of the central bank reaction function.”

4. E4 Monetary Policy Summary and minutes of the Monetary Policy Committee meeting ending on 2 November 2022 Bank of England · 3 November 2022

   “Lending rates for new mortgages had increased sharply since the MPC’s previous meeting, reflecting the sharp rise in risk-free market rates during the period as well as increases since the August Report.”

Moneyfacts reports the average two-year fixed mortgage rate was 2.52% in July 2021. It peaked at 6.65% in October 2022 and 6.86% in July 2023, which is about 2.6 to 2.7 times that pre-2022 level, so the doubling threshold was clearly passed (E1, E2). The Bank of England's November 2022 minutes list the impact of recent fiscal announcements and a higher premium for holding UK assets among the factors behind the rise in UK rates. They also say new mortgage rates rose sharply along with those market rates (E3, E4). So fiscal policy is documented as a contributing cause, though the pre-2022 baseline used is mid-2021 (26 July 2021) rather than late 2021, and the minutes list several other factors as well [E1][E3].