Millions to face shock jump in mortgages repayments over the next two years

MORE than a third of homeowners can expect their mortgages to jump by around £180 a month over the next two years, according to the Bank of England.

The Bank’s latest report into the UK’s financial stability revealed that about three million households are on mortgage rates below 3 per cent.

This is because their fixed home loans were taken out before interest rates started rising and are yet to expire.

Even though interest rates are forecast to be cut soon, the Bank reckons these households will soon be paying 28 per cent more each month.

This works out to an extra £2,160 a year. And about 400,000 households will be whacked with an even bigger hit of paying 50 per cent more, the Bank reckons. 

More expensive housing costs have made it much harder for people to build up savings, it said.

In better news, nearly a fifth of mortgage borrowers will see their monthly payments fall by the end of the year.

About 1.5million — 18 per cent of UK homeowners — have a variable rate mortgage which tracks the Bank interest rate. 

This means that they should benefit instantly as soon as the Bank lowers the rate.

Money markets reckon there is a 50 per cent chance of the Bank cutting them to 5 per cent in September. 

Earlier this month the Bank’s ratesetters kept them at the 16-year high of 5.25 per cent for the seventh time on the bounce. 

Lloyds Banking Group boss Charlie Nunn said yesterday that he expected mortgage rates to stick at a “new normal” of up to 4.5 per cent. 

The chief of the UK’s biggest lender said that markets do not believe the bank rate will fall to below 3.5 per cent.

Therefore mortgages will not fall back to their historical lows of 1.5 per cent or 2.5 per cent, he added.

Spokes too soon?

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THE boss of Halfords has ruled out spinning off its cycling division, despite the struggling division shrinking. 

Wet weather, the cost of living  and hefty discounting by rivals mean bike sales now make up less than 35 per cent of its business.

But boss Graham Stapleton said there were “no plans” to ditch bikes as Halfords yesterday reported an 18.3 per cent drop in  profits  to £36.1million.

Last year the firm rejected a £1.4billion merger with van firm Redde Northgate.

Sell-off of Boots revived

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THE owner of Boots has made its clearest statement to date that it has revived plans to sell the health and beauty retailer. 

Boss of Walgreens Boots Alliance Tim Wentworth told analysts the company had taken “a critical look at Boots” and it would “find innovative ways for this business to fulfil its potential”. 

Analysts confirmed it was business jargon for hoisting the sale sign. 

It is understood that plans for a £7billion stock market listing have been paused. 

Boots yesterday touted its stronger trading with shop sales rising by 3.8 per cent, helped by travel stores, while its digital sales rose by 13.8 per cent in the past three months. 

Walgreens is keen to offload Boots so it can focus on fixing its problems at home,

It plans to shut a substantial number of its 8,600 US stores after profits and weak  sales fell below expectations.

Currys’ U.S. woe

THE boss of Currys blamed a recent takeover bid for undervaluing the firm as its shares tumbled yesterday.

The company’s shares dropped to 71.6p in a 5.8 per cent dip —  despite it returning to the black this year after making profits of £27million.

US firm Elliott offered 67p-a-share — still lower than the shares currently are — to the electricals chain during its offer back in March.

Currys CEO Alex Baldock said: “I don’t spend time worrying about Elliott.

“I only worry about what I control.”

LLOYDS is shutting 60 more branches.

The high street bank has blamed falling customer use for axing 28 Lloyds sites plus 17 Halifax and 15 Bank of Scotland branches between now and next October.

It will retain 946 branches across the UK.