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Highlights
- On 11 May, the Bank of England (BoE) increased interest rates to their highest at 4.5%.
- Britain's average two-year fixed-rate mortgage rate is 5.29%, while the five-year fixed-rate mortgage rate is 4.78%.
As the Bank of England (BoE) increased interest rates to their highest at 4.5% on 11 May, millions of Brits will have to endure mortgage costs. The mortgage costs have been forever rising ever since Kwasi Kwarteng's disastrous mini-budget, which added to the already growing pressures of inflation.
To make matters worse, Threadneedle Street has further indicated that this may not be the last of the lot. The BoE is forecasting that inflation will remain above its 2% target until 2025, and many now accept that their assessment in February was wrong.
Currently, the average two-year fixed-rate mortgage rate in Britain is 5.29%, while the five-year fixed-rate mortgage rate is 4.78%.
The Labour Party is already blaming Rishi Sunak and has urged the PM to take responsibility for failing to live up to his promise. Calling it the "Tory mortgage penalty," Labour Party says the rising mortgage will force homeowners to pay hundreds more monthly pounds.
The current interest rate hike is expected to add £420 a month since the base rate hike began. The Liberal Democrats are now gunning for Chancellor Jeremy Hunt's head if the promised inflation targets of 5.1% by the final quarter of this year.
Amidst this, Kalkine Media® explores three stocks that market participants can watch closely.
Barclays Plc (LON: BARC)
On 15 May 2023, the leading multinational bank witnessed a gain of 0.38% and was trading at GBX 154.48. With a market cap of £23,930.97 million, this FTSE-100 constituent had given its shareholders positive returns of 2.73% on an annual basis and -2.55% on a YTD basis. It has an EPS of 0.38 and a P/E ratio of 4.60.
NatWest Group Plc (LON: NWG)
Another prominent British lender is the NatWest Group holds a market cap of £24,769.99 million and an EPS of 0.25. The FTSE-100 constituent was witnessing a rise of 1.34% and was trading by GBX 264.50. The stock has given its shareholders a one-year return of 17.13% and negative returns of -0.11%.
OSB Group plc (LON: OSB)
Another FTSE-250 constituent, OSB Group Plc, was seen trading at GBX 498.00, up by 0.32% on 15 May. The mortgage lender gave its investors returns of 3.75% on a YTD basis. The OSB Group held a market cap of £ 2,113.03 million, an EPS of 0.76 and a P/E ratio of 4.60.
