According to reports, Kwarteng is expected to ask lenders about their plans going forward.
Following the mini Budget last month where Kwarteng laid out a series of policies which were expected to be funded by government borrowing, the value of the pound dropped due to concerns over the UK’s economic outlook.
This resulted in swap rates surging as markets predicted the Bank of England base rate would rise. In response, lenders withdrew mortgages as they prepared to reprice offerings to keep products profitable and ward off a rush of borrowers trying to secure deals before rates increased.
Average fixed rates have now surpassed six per cent for the first time in a decade and while some products have returned to the market, options are still below what they were before the Growth Plan statement.
Big banking groups expected to quiz Kwasi
Barclays, Natwest and Lloyds Banking Group are among the lenders expected to meet with the chancellor today as well as building societies and representatives from challenger banks. The banks did not have respond to Mortgage Solutions’ request for comment.
The chancellor is also expected to announce reforms to financial services regulation in an effort to boost growth and UK competitiveness over the coming weeks, a spokesperson for the Treasury confirmed.
Kwarteng’s meeting with banks and mutuals follows a statement from the Financial Conduct Authority’s (FCA) chief executive Nikhil Rathi, who asked lenders to provide a timeline for when mortgage products would return to the market.
In an interview with The Sunday Times, Rathi said: “If a product is withdrawn for a temporary period, we want to understand when they’re going to come back to market so that those people who may need to refinance are able to proceed with their plans.”
