The central bank of sterling volatility

Cover Story

uk-ball-and-chain
A sharp rise in short-term rates could quickly make floating-rate mortgage payments unaffordable for many UK borrowers

It could be the Achilles heel of the UK economy: the increasing leverage of British mortgage borrowers to short-term interest rates. With rates and unemployment at low levels in recent years, total UK mortgage borrowing has increased to £774 billion, fuelling a bubble in house prices and supporting a debt-fuelled consumer boom.

However, a sharp rise in short-term rates – perhaps caused by a geopolitical inflationary shock – could quickly make floating-rate mortgage payments unaffordable for many

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: