Mortgages

Fix mortgage mayhem to bank votes, PM 




Having been caught abysmally unawares by surging inflation, the Bank of England appears now to find itself trapped between a rock and a hard place.

After today’s publication of the latest inflation figures, Britain’s central bank may decide tomorrow it has no choice but to hike its base interest rate again for fear prices will continue to spiral.

Yet simultaneously, economists are warning that if Threadneedle Street keeps jacking up rates, it risks plunging the country into an unnecessary recession. For the Bank, neither outcome is palatable. It must tread with extreme caution.

For millions whose mortgages are soon up for renewal, any precipitous increase in monthly payments will be, at best, cause for alarm. At worst, it will be a nightmare, with some in fear of losing their homes.

People have good reason to feel angry with the Bank. If governor Andrew Bailey hadn’t reacted so sluggishly to soaring inflation, he could have upped interest rates more sensitively – allowing families to plan and easing their financial pain.

On top of that, its colossal money-printing programme drove borrowing rates down to rock bottom levels, while fuelling a house price boom. To get a toehold on the property ladder, many buyers had to take out huge loans. Now as rates rise, they find themselves under the cosh.

The political repercussions of this aren’t hard to predict. Disgruntled mortgage payers blame ministers for their plight.

A new poll puts Labour 22 points ahead. Without the backing of homeowners, who traditionally vote Tory, Rishi Sunak’s chance of victory is practically zero.

Yet Chancellor Jeremy Hunt is correct to ignore the siren voices demanding a multi-billion-pound bailout for mortgage-holders. Such an intervention would be unaffordable, inflationary and unfair: Those who don’t own a property subsidising those who do.

But equally, doing nothing would be electoral suicide. Mr Hunt is right to try to encourage lenders to do more to help families struggling with repayments.

The past fortnight has been unedifying for the Tories. Voters have been aghast at the rows over peerages and the Punch and Judy politics over Partygate. The party desperately needs to unite.

Nothing is more important than showing it understands the financial hardships people are enduring – and that it is up to the challenge of tackling them.

Backsliding on Brexit

Shadow foreign secretary David Lammy (pictured) said it was of ‘fundamental importance’ that the country forges closer economic ties with Brussels

If anyone doubted that Labour would be itching to reverse Brexit if it ever wins power, David Lammy let the cat out of the bag yesterday.

The shadow foreign secretary, a hysterical Remainer, said it was of ‘fundamental importance’ that the country forges closer economic ties with Brussels.

But why? We already have a sweeping free trade deal. The truth is, Mr Lammy just wants to drag us back into the ambit of Brussels in the hope British voters can be browbeaten into thinking again.

If Labour is salivating at the prospect now, just think what they’d be like in a coalition with the EU fanatical Lib Dems.

Lesson to be learned

A principal duty of the state is to ensure children are properly educated. Yet during the pandemic, schooling became an optional extra, as classrooms were closed.

The consequences were dreadful. Study after study has shown shutting schools harmed the educational, social, physical and mental wellbeing of every pupil.

Yesterday, Dame Sally Davies agreed. The former Chief Medical Officer for England told the Covid-19 inquiry a generation had been ‘damaged’.

When the tribunal reaches its conclusions, it must ensure such a disastrous policy of school closures never happens again.



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