Why the latest developments could be bad news for mortgage rates
After a brief period of easing tensions between Washington and Tehran, markets are now pricing in a risk premium again. That’s had an impact well beyond the gilt market: US stocks fell broadly on Wednesday, with the Dow down around 1% shortly after the opening bell, while government bond yields also ticked higher in the US.
That pattern forced UK lenders to withdraw and reprice fixed-rate products at pace back in February. For now, it remains to be seen whether a similar scramble from lenders could occur in the days ahead.
Speculation had already grown about potential rate hikes by the Bank of England in the coming months, and the latest jump in oil prices could put fresh pressure on decisionmakers to act.
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