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☆ Why Britain’s Mortgage Holders Are Being Squeezed
▼ + stars: | 2023-07-19 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +1 min

Many people in Britain have mortgages with a rate that is fixed for only a short period, commonly two or five years, unlike U.S. mortgage rates, which are often fixed for 30 years. At the end of the fixed period, mortgage holders can shop around for different offers, usually choosing between a variable-rate mortgage — which can move up and down whenever the lender decides or with interest rates — or another fixed-rate loan. In Britain, one of the most direct ways that higher interest rates affect people is through higher mortgage rates, but the impact varies greatly across the population. Just over a third of households own their home outright, so will be insulated from rising mortgage rates. On average, households with mortgages will pay almost 280 pounds (about $365) more each month, if mortgage rates stay at their current levels, compared with March 2022 rates, according to the Institute for Fiscal Studies.

Organizations: Institute for Fiscal Studies Locations: Britain

Prime Minister Rishi Sunak hopes to hold onto power by selling himself as the repairman for a broken Britain. But with inflation still high, debt ballooning and growth sputtering to a halt, economic woes may prove to be Mr. Sunak’s undoing. Mr. Sunak’s challenges could become more difficult on Wednesday when Britain’s inflation rate for June is announced, with analysts saying it could remain above 8 percent. That would put at risk one of the five targets Mr. Sunak set for his government: to halve the inflation rate by the end of 2023. Britain’s annual inflation rate is higher than that of its European neighbors and twice that of the United States.

Persons: Rishi Sunak, Sunak Organizations: Conservative Party Locations: Britain, —, United States

☆ U.K. Inflation Rate Slows to 7.9 Percent, as Price Pressures Ease
▼ + stars: | 2023-07-19 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +4 min

Headline inflation rates have declined, but policymakers are closely watching other measures of price pressure that signal how deeply inflation has become embedded in the British economy. In June, some of these price pressures eased: Inflation in the services sector slowed slightly to 7.2 percent, and core inflation declined for the first time since January. In January, the government pledged to halve the inflation rate by the end of this year, which would mean a fall to 5.2 percent. This partially explains Britain’s relatively high inflation rate — which is higher than in Western Europe and double the rate in the United States — but there are other reasons that inflationary pressures in Britain are strong. The Bank of England raised its interest rate a 13th time last month, to 5 percent, from 0.1 percent in late 2021.

Persons: Price, ” Andrew Goodwin, Mr, Goodwin, ” Andrew Bailey, Bailey Organizations: Oxford Economics, Bank of England, Employers Locations: British, Europe, Britain, Western Europe, United States

☆ How to Revive a Dying Main Street? One U.K. Landlord Offered Free Rent.
▼ + stars: | 2023-07-12 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +1 min

They each have to pay rent, but several said they were still getting a good deal. Changes on Kingland Crescent have flowed into the neighboring shopping center that Legal & General also owns. “Poole was our pilot,” said Denizer Ibrahim, who leads the retail strategy at Legal & General. After two years of gathering data, the landlord is thinking about what worked and can be replicated elsewhere. But it does not expect to offer free rent again.

Persons: Ms, Dean, “ Poole, ”, Denizer Ibrahim, Ibrahim Organizations: General, National Health Service, Legal Locations: Kingland

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