UK mortgages: ‘next 10 days crucial’ in how much rates rise

Building society chief responds as stock market falls and pound slides after Kwarteng's mini-budget

Mortgage rates in the UK will rise further in coming days, and the next 10 days in financial markets will be crucial in determining how high they will go, according to the head of Principality building society.

Experts are predicting that a typical two-year fix, which has cost borrowers 850 a month, could go up to almost 1,500 a month, after Kwasi Kwarteng's mini-budget on Friday shocked markets and sent the pound plunging, as well as triggering a government bond sell-off. Sterling hit a record low of about $1.035 on Monday morning and has recovered slightly to $1.08, but is still down 7% this month.