Express: Bank of England interest rate worries over mortgage deals update

Homeowners hoping for lower mortgage rates have been dealt a fresh blow after inflation jumped to 3% - dashing hopes of a price war among lenders and adding to the headaches facing the Bank of England.

Mortgage experts now warn that the sub-4% deals, which recently sparked excitement among borrowers could soon disappear. The shock rise in inflation, up from 2.5%, has rattled markets, making it less likely that the Bank of England will cut interest rates any time soon.

So-called swap rates, which are the interest rates financial institutions charge to one another to borrow, have been rising followers news of the inflation rate rise.

Harps Garcha, Director at Brooklyns Financial said: 

"With swap rates reacting sharply, recent mortgage rate reductions may be short-lived. Those looking to secure a new fixed-rate for their mortgage should consider acting sooner rather than later, before lenders adjust rates in response to the shifting market."

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