Key points
- As four lenders raise rates, what's going on with mortgages?
- Edible seeds, air fryers and vinyl added to ONS 'inflation basket' - with stout and hand gel out
- How much does it cost to go (and stay) blonde?
- Money Problem: My contract says I must be in office two days a week - but my boss is pushing me to come in more
- Complaints vs compliments: Does being nice to brands get freebies?
- How to pick clothes that will last a long time
Ask a question or make a comment
What's going on with mortgage rates? Why hikes may not be cause for concern
As three major lenders announce mortgage hikes (edit: now four, with Halifax announcing changes on Monday afternoon), we thought now was a good time to give an overview of the market - and where rates are headed.
Current average fixed mortgage rates are 5.78% for a two-year (up from 5.56% at the end of January) and 5.35% over five years (up from 5.18% in January), according to Moneyfacts.
This uptick has been caused partly by rising swap rates - these dictate how much it costs lenders to lend.
But, despite several weeks of turbulence on the high street, there has been no change to market forecasts for a first base rate cut.
This is still priced in for June - when the expectation is the Bank of England will move its rate from a 16-year high of 5.25% down to 5%.
Two further cuts are then expected before December - which would put the base rate at 4.5% as we head into 2024.
Again, this has been the expectation for a couple of months now. This context, and the markets reacting calmly to last week's budget, suggests what's happening at the moment shouldn't be overly concerning - the base rate is still expected to fall at the same time and pace as it was in January.
The Bank of England withdrew language about further hikes in January - though its tone has remained cautious about cuts. Back then, six of its rate-setters voted for a hold, two for a hike and one for a cut.
We'll hear more from them about their thinking (but there almost definitely won't be a cut) when its next rate decision is announced a week on Thursday.
Before then we have tomorrow's wage data - if this comes in high, it might encourage caution from the Bank, as high wages contribute towards inflation (and the purpose of keeping interest rates high is to cut inflation, by squeezing the economy).
We'll also hear February's inflation data next Wednesday - it's currently 4%, and a move towards the target of 2% may lead to positive noises about rate cuts.
One other thing to consider is the current strength of the pound, which is beating more than 90% of the world's currencies this year, according to Bloomberg.
A strong pound can sometimes signal there is over-demand (inflation) in the economy, especially if the economy is currently weak (as is the case).
In summary, the current hikes we are seeing seem to be a blip in what should be a downward trend this year. But, of course, things can change.
Pay rise for Primark staff | Bumper month for Heathrow | Net zero cowboys warning
Primark has announced it is giving 27,000 of its shop workers a pay rise.
From next month, when the minimum wage increases, the fashion brand will up its average hourly rate by 9.1% - to £12 in England, Scotland and Wales, and £12.56 in London.
The minimum wage for people aged 23 and over is rising to £11.44 on 1 April, an increase of 9.8%.
Heathrow has had its busiest ever February as demand exceeded levels before the pandemic.
The airport said 5.8 million people travelled through its terminals last month, up from 5.2 million last year, and 5.5 million in February 2019, before COVID hit.
Heathrow boss Thomas Woldbye said it was "wonderful to welcome so many passengers" and set a new Heathrow record, but seized the chance to brand the Treasury's failure to reintroduce tax-free shopping for tourists buying goods in the UK last week as a "missed opportunity".
Property owners are falling victim to cowboy builders who are botching net zero home improvements, the government has been warned.
Thousands of complaints were logged by Citizens Advice last year over faulty solar panel installations and dodgy insulation products, according to The Daily Telegraph.
It has prompted the Chartered Trading Standards Institute to warn ministers: "If ever there was a time to regulate this industry, it's now. The government needs to get this by the scruff of the neck."
Car finance scandal growing as more than one million drivers complain
More than one million drivers claim they have been mis-sold car finance in a growing scandal that has the potential to be the "second biggest reclaim payout in UK history" after PPI.
That's according to consumer champion Martin Lewis, whose website Money Saving Expert is receiving 30,000 complaints a day from motorists worried that they were overcharged.
The website launched a free tool last month for drivers to submit complaints after the UK's financial regulator opened a major investigation into unfair and hidden selling practices in the car finance market.
"The numbers of complaints in not much more than a month is staggering - off the charts - far more than I expected," Lewis said.
Before a ban three years ago, some lenders allowed brokers to adjust the interest rates offered to customers for a loan. Research found the practice, known as a discretionary commission arrangement, led to higher finance costs and was unfair to consumers.
The issue "feels like it is building up even more quickly" than the PPI scandal, Lewis said.
Lloyds had to pay customers who were mis-sold payment protection insurance from the mid-1990s billions in compensation.
"In value terms, car finance mis-selling is potentially going to be the second biggest reclaim payout in UK history - possibly over £10bn repaid - which could even provide a fillip to the economy as PPI did," Lewis said.
The most complained-about lenders by drivers using the tool so far are:
- Black Horse, which is owned by Lloyds and offers loans on cars including Jaguar, Land Rover and Suzuki
- Volkswagen Finance Services
- Stellantis
- Santander
If you're worried you may have been mis-sold car finance, you can use Money Saving Expert's free reclaim tool here.
How much does it cost to go blonde? (It turns out, quite a lot)
By Emily Mee, Money team
About two years ago, I decided to follow in the footsteps of many fellow mousy haired women before me and go blonde.
My confidence instantly thanked me - my bank account did not.
It turns out, maintaining blonde locks is more of a way of life than you would imagine.
There are the touch-up trips every eight to 10 weeks or so, the more frequent hair cuts to keep the split ends at bay, and of course the expensive products to maintain good condition.
For lots of us, it's worth it - but there are some things I wish I'd known before taking the plunge.
What costs should you weigh up?
Prices range so much across individual salons, and particularly across regions, that it's difficult to give an estimate of how much it will cost you.
Think carefully about exactly what look you want, because prices can differ massively for different types of services - you might go for a full head bleach, full head highlights, half head highlights, balayage, or even AirTouch balayage.
There's more to consider - do you want a face frame, a root shadow, or any other extras?
For a balayage, we've seen prices ranging from £60 to £200.
Highlights can look like a similar price upfront - but they'll need topping up more often (you can see an example of some highlights below).
Here are some more costs that are worth considering...
- Will you need a hair treatment, such as Olaplex or K18, at your appointment? Many hair colourists will recommend you include these to keep your hair in good condition if you're bleaching it. We've seen this add anything from £10 to £35 to the cost of your service.
- Are you getting a cut and blow dry at the same time? You might be able to keep costs down by opting for a rough dry instead.
- How long is your hair? Some salons might charge you more if you have longer hair.
- Are you paying separately for toner? While some salons will include this in the cost of your service, many charge this separately.
- How often will you need touch-ups? You can leave a balayage for six months to a year, while highlights or root bleaches might need another appointment within eight to 10 weeks (depending on how fast your hair grows).
- You might be recommended to use a purple shampoo - these can prevent your bleached hair from going brassy.
- Your hairdresser might also suggest you use hair masks once a week, and/or switch out your shampoo and conditioner to something more nourishing for your hair. For example, a bottle of the often-recommended Olaplex shampoo or conditioner will set you back £28 a pop.
Why can your appointments seem expensive - and is it worth skimping out?
It does seem like going blonde has got more expensive in recent years. But hairdressers argue that's because their costs have risen dramatically, and clients are expecting more from their services now.
Paula Pop (@mpaulapop), an experienced hairdresser and co-founder of Glam Hair Studio in southwest London, explains prices often depend on "the complexity of the service and the time spent to achieve a certain end result".
"The products used can differ in price - that's why you might find slightly cheaper places for a similar service, but that means the products used are cheaper."
Paula says she's tried it all, "but in my experience if you want luxury hair you need to use luxury products".
More experienced hairdressers will also know how to choose the bleach that works for your hair.
"Of course if you're on a budget you can go for a beginner level [hairdresser] but you should not expect the end result 'magazine cover worthy' and you should have lots of patience as it might take a while," she says.
As for whether you can go for cheaper haircare products after your salon visit, Paula says she doesn't recommend this.
"If you don't believe me you can try it yourself - you should see a difference," she says.
"Blonde hair needs moisture and protein, lots of oils and masks to hydrate the hair."
She explains you should see immediate results when you use high-end products as they tend to have higher quality ingredients.
Breakage is no joke
Not taking care of bleached hair properly or skimping out on your salon appointment can result in the dreaded breakage.
It's something I've dealt with personally (and it's meant I've learned my lesson to seek out an experienced hairdresser).
Paula also says haircare shouldn't end the minute your appointment is over, warning it will get "drier and drier with every wash and every styling" if you aren't using the right products.
Still got that blonde ambition?
Asked why so many people (myself included) are still going blonde despite the costs, Paula explains: "I think it's about how it makes you feel more then anything.
"Looking after your hair is something so personal and it can change the way you feel and the way you look.
"When you take a selfie, your hair takes maybe 50% of that picture, so that's a reason to want to invest in your hair as it's on your head, close to your face, and it can influence your mood."
Halifax becomes fourth lender today to raise mortgage rates
The lender has joined NatWest, Santander and Co-op Bank in announcing rate hikes today.
A range of homebuyer rates will be up to 0.20% higher from Wednesday.
We have looked at what's going on - and why rates should still head down this year - in our 12.36 post.
Warning price of sugar could rise
The UK competition regulator has warned a sugar deal between the makers of Tate & Lyle and Whitworths could make the staple more expensive for British shoppers.
T&L Sugar's deal to buy Tereos's sugar business prompted an investigation by the Competition and Markets Authority, which determined it could lead to a "substantial lessening of competition".
These two companies only face competition from one other business, British Sugar.
Supermarkets could be forced to pay more for sugar and end up passing the cost on to customers as a result, the watchdog said.
"The supply of sugar to grocery retailers in the UK is already highly concentrated," said CMA senior director of mergers Sorcha O'Carroll in a statement.
"This deal would bring together two of the three players in the UK sugar sector, reducing competition and choice further for people and businesses."
The regulator has given the companies five days to offer solutions before a more in-depth investigation is launched.
T&L Sugar said it is "absorbing" the feedback and "deciding how to progress", while Tereos said it was assessing the implications.
Two more lenders announce rate changes
We are hearing about more mortgage rate changes - this time from Santander and the Co-operative Bank.
Santander is increasing residential fixed and tracker rates in the new business and product transfer ranges.
It is also reducing other selected residential fixed rates for remortgage clients, and all buy-to-let fixed rates in the new business range.
The Co-operative Bank for Intermediaries changes all seem to be upwards, including mainstream product switch two, three and five-year fixed products being increased by up to 0.72%, and buy-to-let product switch two, three and five-year fixed products increased by up to 1.09%.
It follows NatWest announcing small hikes in rates earlier.
Robert Timm, managing director of Sunland Mortgages, told Newspage: "The relatively peaceful end to last week is most definitely now in the past. Three lenders announcing mostly increases to their range has caused disheartenment in this office, particularly when gilts data has been looking positive. Hopefully this is a temporary blip."
Rohit Kohli, director at The Mortgage Stop, said: "Major lenders like NatWest, Santander and the Co-operative Bank announcing increases is not the start to the week borrowers wanted.
"It's looking like lenders are thinking any cut in the base rate now won't happen until later this year, which will worry the thousands of people who were hoping the Bank of England would take some form of action in the coming weeks as their fixed rates come to an end."
NatWest increases mortgage rates for existing borrowers
NatWest is increasing rates for existing borrowers from tomorrow:
- Switcher:Rate increase of up to 10bps on selected two and five-year deals;
- Buy to Let - switcher:Rate increase of 5bps on 75% LTV two-year deal with £995 product fee.
We've got some reaction from experts via industry news agency Newspage...
Gary Bush, financial adviser at MortgageShop.com, said: "Due to new affordability calculations, many of NatWest's existing customers will be unable to switch to other lenders, so this is not a good look. Lenders have a captive audience due to affordability reasons but that doesn't mean they should profit from it."
Elliott Culley, director at Switch Mortgage Finance, added: "After a steady budget and a positive market reaction, it is a surprise to see an increase from NatWest. There is a usually a lag between changes in the market and rate changes, so provided the positive outlook for the market continues I would expect these rate increases to be temporary."
Vinyl added to ONS 'inflation basket' after Taylor Swift boost - Guinness and hand gel out
The hypothetical shopping basket used to measure the headline inflation figure has been tweaked due to changing consumer habits.
It happens every year - and this time gluten free bread, air fryers and edible seeds are among the items included as Britons' shopping habits reflect a desire for a healthier lifestyle.
The resurgence of vinyl also sees it included for the first time in more than 30 years - and Taylor Swift can take some credit here.
Her album 1989 (Taylor's Version) was the best-selling vinyl LP of last year - beating the Rolling Stones' Hackney Diamonds and helping to ensure the highest vinyl sales in the UK since 1990.
Sixteen items have been added to the 744-item basket, with 15 removed.
The ONS said: "Gluten free bread has been added to reflect the increasing shelf space and range of gluten free products.
"Air fryers are another addition, with consumers reportedly drawn to the energy-saving features as well as health benefits compared with conventional fryers. Spend on cooking items such as air fryers reportedly increased by over 30% between 2021 and 2022.
"Edible seeds have not previously been represented in the baskets, but sunflower and pumpkin seeds have been added this year, reflecting their growing popularity. They are often seen as a healthy snack by consumers."
Some new items have been introduced to diversify the range of products collected for already established groupings:
- Rice cakes - as "research suggests growing popularity as part of a healthier lifestyle";
- Spray oil has been added "based on its shelf space and widened range";
- Vinyl records have been added back into the basket for the first time in over 30 years, "reflecting a resurgence in popularity";
- A card game has been introduced "to help spread the weight of existing games and expand the range represented";
- Two new data storage devices - an SD card and USB stick replace the current portable digital storage device item.
What has disappeared?
Fifteen items have gone this year.
The ONS said: "In some cases, this reflects low or decreasing expenditure and falls in stock levels for pricing. For example, hand hygiene gel has seen a reduction in shelf space since the height of the coronavirus (COVID-19) pandemic."
Draught stout and bakeware have been removed as prices tend to follow draught bitter and frying pans respectively - and the latter are in the basket.
Takeaway hot drinks and cooked ham products have also been consolidated into one item each in the basket.
"Finally, collection issues can influence changes and, as such, a hot rotisserie cooked chicken has been dropped as some supermarkets have stopped selling this item," the ONS said.
Currys shares dive after bidder says it won't improve offer
By Sarah Taaffe-Maguire, business reporter
This week hasn't started well for the London-listed wealth manager St James's Place.
Two weeks ago this blog brought you the news of the shock 30% fall in the company's share price. It came after the firm announced it had set aside £426m to compensate clients for sub-standard service and was reducing its fees and controversial client early-exit charge. After further 1.45% falls today the share price is down 28% in the last month.
A bidder for electronic retailer Currys, Elliot Advisors, officially said this morning it isn't submitting a better offer after its second bid worth £757m was rejected. Shares in Currys fell 8.6% in price.
A barrel of Brent crude, the benchmark for oil prices, costs $82.07.
One pound buys $1.2835 and equals £1.1730.
