Fueling Higher Costs at the Pump
Drivers across the UK are already feeling the pinch at the petrol station, with average unleaded prices reaching an 18-month high of 142.62p per litre. Diesel has seen an even steeper climb, up by more than 20p to 162.66p, according to the RAC. Analysts warn that every $10 surge in crude oil prices can translate to roughly a 7p increase at the pump. While fuel supplies remain adequate, motorists are being urged to curb non-essential journeys and adopt more fuel-efficient driving habits. But the impact doesn’t stop with car owners; higher transport costs for businesses, like supermarkets, can eventually filter through to the price of everyday goods.
Mortgage Rates on the Rise Amidst Uncertainty
The hope for a steady decline in mortgage interest rates has been dashed as the Iran conflict injects fresh economic uncertainty. Major lenders have begun increasing their rates, citing rising funding costs and a revised expectation that the Bank of England’s base rate won’t fall as soon as previously anticipated. The average two-year fixed mortgage rate has climbed from 4.83% in early March to 5.32%, its highest point since last April. For those seeking a five-year deal, rates have also edged up. This translates to potentially hundreds of pounds more per year for new mortgage holders. The market has also seen a withdrawal of hundreds of mortgage products, narrowing consumer choice during a period of financial volatility.
Energy Bills: A Capped Concern with a Shifting Horizon
While a price cap offers some respite for household gas and electricity bills in England, Wales, and Scotland, its protection is time-limited. The current cap, set by energy regulator Ofgem, is in place until July. However, the wholesale energy market’s performance in the coming weeks will be crucial in determining the cost of energy from the summer onwards. A sustained period of high wholesale prices could lead to significant increases for millions. Energy providers are also pulling deals or raising prices for those looking to fix their energy tariffs, mirroring the situation seen in the mortgage market, with fewer longer-term options available.
📰 Source: BBC Business
