Bank of England Raises Concerns Over Private Credit and Mortgage Price Shock

The Bank of England has revised its prediction of struggling mortgage holders, suggesting that fewer households will struggle to make mortgage payments than previously expected. However, the bank's analysis also reveals a "payment shock" for some borrowers, with nearly 900,000 expected to see their mortgage payments increase by over £500 per month due to higher interest rates. The bank estimates that five million mortgage accounts have already been re-priced since December 2021, and another five million will see their payments rise by 2026. On the other hand, the Financial Conduct Authority (FCA) reports signs of more competitive interest rates for cash savers, with some easy-access savings products offering interest rates of 5% or more. However, the FCA encourages customers to shop around for the best savings deals and urges banks to prompt customers in lower-paying accounts to move.