It really would be heartless to let inflation take hold

SOMETIMES what seems obvious turns out to be anything but a good idea after all

- Stephen Pollard

Take the proposed mortgage interest relief. It's widely expected that when the Bank of England's Monetary Policy Committee meets on Thursday, it will raise interest rates from the already whopping 4.5 per cent base rate, most likely to 4.75 per cent. Market watchers say over the next few months we may well end up reaching 6 per cent. That's a whole world of pain especially for mortgage holders.

The vast majority of mortgages now are fixed rate. That's great for those who took out a deal when rates were low. It now seems so long ago, but it was as recent as December 2021 when they were still just 0.1 per cent.

The Bank of England's figures show some 35,000 mortgage deals coming to an end every week for the rest of this year. That's when the pain of today's rates is going to really hit as they move from less than 2.5 per cent to the 6 per cent that is now the norm. According to the Resolution Foundation thinktank, by next year the rise in rates means people will be paying an average of £2,900 a year more for their mortgage.