Lenders pull back mortgage products amid market volatility

View this email in your browser

28th September 2022

Bite-sized business news from the UK and beyond

Good morning There are just three days left to use paper £20 and £50 banknotes as this Friday marks the last day before they lose their legal tender status, as they'll be replaced by new polymer versions. There are still more than £5bn worth of paper £20 featuring the economist Adam Smith in circulation, and nearly £6bn worth of £50 notes featuring the entrepreneur Matthew Boulton and the engineer James Watt.

Today's stories

Lenders pull back mortgage products amid market volatility
Revolut gets crypto green light

ECONOMY
Lenders pull back mortgage products amid market volatility

What happened?
The fallout from Friday’s mini budget has continued with several mortgage providers withdrawing almost 300 deals.

How did we get here?
The UK economy is experiencing some serious turbulence as investors give a big thumbs down to the government’s new fiscal plan of big spending and low taxes.

On Monday the pound fell to its lowest-ever level against the US dollar (before recovering slightly) as investors think the new economic plan will make inflation worse and overload the public debt.

Markets seem to think that the hoped-for growth will not materialise and tax cuts will fuel higher inflation forcing the Bank of England to raise interest rates even higher, something it’s made clear it won’t hesitate to do.

Currently investors expect a 1.5% rate hikes by November to take base rates to 3.75% and then to peak at 6.25% next year - the highest since 2001. The greater uncertainty around interest rates and the general economic environment has made lenders more cautious and will increase the rates they charge on mortgages.

In anticipation of rising rates HSBC, Santander, Halifax, Virgin Money, Atom Bank, Post Office and Skipton Building Society have pulled hundreds of fixed-rate mortgage deals from the market. Other lenders like Nationwide have increased the proportion of deposit needed for a mortgage.

According to brokers, banks still welcoming new customers have been swamped by demand from would-be homebuyers.

Zooming out: For most of the 14 years since the financial crisis of 2008, the Bank of England has kept base rates at below 1%. This allowed for cheap mortgage offers and an era of rapid house price inflation. But with central banks worldwide hiking interest rates the days of cheap borrowing for households and businesses may be coming to an end.

Other stories to keep you in the loop

Labour plans publicly owned renewable energy giant
IMF urges UK government to reconsider tax-cutting plans
Chancellor tells City bosses his economic plan ‘will work’
Royal Mail workers to strike on 19 days over next two months
Netflix plans to launch its own video game studio
Most energy companies falling short with helping customers pay their bills, Ofgem warns
King Charles to feature on notes and stamps as new monogram revealed
Boohoo founder loses £500m

FINTECH
Revolut gets crypto green light

What happened?
Yesterday it was revealed that banking app Revolut has been given the regulatory go-ahead to offer crypto services in the UK following a lengthy wait.

How did we get here?
In 2020 the financial watchdog, the FCA, asked firms to register for approval to offer their crypto services in the UK. Revolut was placed on a temporary approved list after the application from the London-based fintech, valued at $33bn, was not deemed up to scratch the first time round.

Revolut is the last firm held on the regulator’s temporary register and now joins 37 other firms to have received full authorisation in the UK after strengthening its anti-money laundering controls.

Revolut is serious by crypto
The company has grand ambitions of being a financial super app where users can do all their saving, investing and borrowing in one place. The growth in popularity of digital currencies makes crypto a key part of this strategy. The company has tripled headcount in its crypto team since July 2021 and intends to grow the team by a further 20% in the next six months mainly in the US, UK and Europe.

The crypto approval is a win amid other challenges
Revolut is still waiting for a decision on its UK banking licence, is under fire on its auditing and a cyber attack that affected about 50,000 customers. In July five executives quit the firm including its UK chief risk officer and UK Money Laundering Reporting Officer.

Stat of the day

Covid-zero policies and the housing market crisis have put China’s economic growth behind the rest of the Asia-Pacific region for the first time in more than 30 years, according to World Bank forecasts

Interesting links from around the web

How going grey became a new power move for women at work
Science says you'll live longer if you can pass these 4 tests
How much it costs to charge your phone and laptop

Forward to Friend

Not a subscriber? Join free

How did you like today's email?
Get in touch with any feedback or even just to say hi
hello@marketloop.co

Copyright © 2022 Market Loop, All rights reserved.

Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list.

This email was sent to you
why did I get this? unsubscribe from this list update subscription preferences
Market Loop · 16 Great Chapel St · London, London W1F 8FL · United Kingdom

Lenders pull back mortgage products amid market volatility

Older messages

Sterling gets a pounding

Government gambles on growth with mega ‘mini’ budget

Another day, another rate rise

Government slashes business energy bills

Politics returns with busy week of announcements

You Might Also Like

The #1 customer LTV in the world (4 keys)

Lessons From Dot Com Boom

Topic 32: What is Qwen-Agent framework? Inside the Qwen family

🦅 This will help you from being stopped by imposter syndrome

From $0 to $12 Million Per Year With Fat Joe

Skype is dead, but SORA changes everything😲(read ASAP)

You’re the heart of social—we see you

Here’s the One Investment That Can Change Your Life in 2025

Founder Weekly - Issue 677

A look at the categories for this year's Greater Good Awards