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Which? warns of rising mortgage rates after bank downgrades

Which? is warning that mortgage rates could rise after major UK banks saw their credit rating downgraded by Moody’s last night.

Moody’s downgraded Lloyds Banking Group, Royal Bank of Scotland, HSBC and Barclays as part of a wide ranging lowering of global banks’ credit rating which it blames on significant exposure to volatility and risk of out sized losses

The consumer champion says the downgraded UK banks could all face higher borrowing costs leading to higher mortgage rates.

Richard Lloyd, executive director at Which?, says added the downgrades will lead to speculation that it will cause a further rise in mortgage rates.’

He says: ‘For too long banks have taken advantage of the lack of competition on the high-street to increase the interest rates charged on mortgages, loans and overdrafts, with over one million consumers seeing their yearly mortgage payments increase by over £300m with SVR rises earlier this year. 

“This is why we cautiously welcomed the Chancellor’s recent “funding for lending” scheme. But we want to see strong safeguards in place to ensure that banks pass on this cheap credit to consumers.”

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Comments
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  • Neville Bartos 25th June 2012 at 10:02 am

    Bill regardless of your thoughts regarding Which? & their ‘unqualified’ predictions the fact is the consumer perceives such organisations as trustworthy & pro-consumer so take this opportunity to ‘piggy-back’ on such speculation and get rebroking your SVR surfers where appropriate, bolt on some Life & G.I and you can be Elvis for the weekend. Theres always a positive in every negative situation you have to find it and embrace it.

  • Bill Wells 22nd June 2012 at 6:00 pm

    Who cares what Which? thinks about what the future holds for mortgage rates ? There are enough ‘qualified’ predictions without the need for unqualified, irrelevant organizations such as Which? to be putting in their two-pennyworth. Why is anyone reporting on what they think ???