UK Lenders Raise Fixed Mortgage Rates on Swap Surge

Several major UK mortgage lenders have announced increases to their fixed-rate mortgages, effective from this week, as escalating conflict in the Middle East drives up energy prices and swap rates. HSBC UK and Nationwide Building Society will raise rates on Friday, while Coventry Building Society plans adjustments on Monday, affecting first-time buyers, home movers, remortgagers, and those switching deals.

The hikes stem from a sharp rise in swap rates, which lenders use to price fixed-rate mortgages and which reflect market expectations for future Bank of England interest rates. These rates climbed earlier this week amid volatility in oil and gas prices triggered by the conflict, raising fears of higher inflation. Analysts note that sustained high energy costs could add 0.3 to 0.7 percentage points to inflation, depending on the duration of the shock. Nationwide specified increases of up to 0.25 percentage points on selected fixed rates, while HSBC and Coventry described the changes as responses to funding cost pressures, though exact figures for all products were not detailed.

A spokesperson for Nationwide stated, "We keep our mortgage rates under continual review to ensure we...