Commons Sense

House of Commons · Ministers' Questions

Mortgage Rates and the Bank of England

Tuesday 11 October 2022 · 5 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 0 Partly answered 1 Not answered 0

Key points

  • The Chancellor speaks regularly to the Governor of the Bank of England on a wide range of matters.
  • The Government supports growth, provides energy bill support, and implements supply-side measures.
  • The Government tackles supply-side issues and builds energy supplies while addressing strikes.

Topics (select to filter)

Questions & Answers

Q1 Laurence Robertson Con
Economy Housing
Context

The recent increase in mortgage rates is affecting borrowers adversely, despite the government's efforts to mitigate other costs such as energy expenses and tax cuts.

Question

What recent discussions has he had with the Governor of the Bank of England on rising mortgage rates? Will the Chancellor and Ministers meet more regularly with the Bank of England to co-ordinate policy a little more closely?

Answer from Andrew Griffith

The Chancellor speaks regularly to the Governor of the Bank of England on a wide range of matters. The Chancellor and I regularly meet the Bank of England and all the individual lending banks in the UK. Interest rates have increased in every major economy despite what the Opposition may claim.

Partly answered

Not addressed: Meeting more frequently with the Bank of England to coordinate policies was not addressed directly.

How: Regular Meetings Already Occur, Global Trend

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Q2 Laurence Robertson Con
Economy
Context

The government's mini-budget caused chaos in the bond markets due to £45 billion of unfunded spending and tax cuts, potentially increasing interest rates for all borrowers.

Question

Does he now apologise for the chaos his mini-budget with its £45 billion of unfunded spending commitments and tax cuts has caused to the bond markets? Is it not a fact that there is a Tory premium on every interest rate rise for every borrower in this country?

Answer from Andrew Griffith

The Government are supporting growth, providing support for energy bills and cutting taxes. They are boosting the economy with supply-side measures while opposing striking workers.

Not addressed: Apologizing for the chaos caused by the mini-budget was not addressed directly.

How: Supporting Growth, Opposing Strikes

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Q3 Angela Eagle Lab Wallasey
Economy Housing Energy
Context

The Chancellor's mini-budget led to a sharp increase in two-year fixed mortgage rates above 6% for the first time since 2008, affecting many home buyers negatively.

Question

Why should people who have worked hard to buy their own home pay the price for the Government's mistakes? Why will Government borrowing cost more next year as a result of rising gilt yields?

Answer from Andrew Griffith

We have talked about our comprehensive energy support package, which will help households this winter. We are also improving the supply side of the economy to grow and create tax revenues.

Not addressed: Addressing rising mortgage rates and increased borrowing costs was not directly addressed.

How: Energy Support, Supply-Side Measures

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Q4 Pat McFadden Lab Wolverhampton South East
Economy
Context

The Bank of England warned about a material risk to UK financial stability due to the Chancellor's mini-Budget, which has increased gilt yields significantly.

Question

How much more will Government borrowing cost next year as a result of the rising gilt yields since the Chancellor's statement on 23 September?

Answer from Andrew Griffith

We are seeing interest rates rise in every major western economy. The Government is protecting consumers and households through difficult winter months, cutting taxes.

Not addressed: Specific cost increase of government borrowing due to rising gilt yields was not addressed.

How: Global Trend, Protecting Consumers

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Q5 Pat McFadden Lab Wolverhampton South East
Economy
Context

The International Monetary Fund observed that the Chancellor's unfunded tax cuts have complicated the fight against inflation, leading to higher interest rates and potential mortgage defaults.

Question

What is the Minister and his Treasury team doing to tackle the absolute chaos they have created?

Answer from Andrew Griffith

The Government is tackling supply-side issues, strikes that hinder the economy, and building energy supplies. The nationalist party talks down the country but we take action.

Not addressed: Addressing the chaos caused by fiscal policies was not addressed directly.

How: Supply Side, Strikes

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