Treasury warns of potential impact on mortgages

According to the Treasury, Labour's plan to borrow an additional £28 billion could result in mortgages increasing by almost £2,000 per year. The Treasury claims that for every additional one percent of GDP borrowed, interest rates are likely to rise.

Modelling suggests potential increase

Treasury modelling suggests that, based on current economic conditions, the increase in mortgages under Labour's borrowing plans could range from 0.5 to 1.25 percent. This means that a household with a £200,000 mortgage over 30 years could face an additional £1,920 per year if interest rates rise by 1.25 percent.

Treasury Chief Secretary warns of economic consequences

Treasury Chief Secretary Laura Trott has warned that Labour's borrowing plans could jeopardize the British economy, which is currently experiencing low inflation. She stated, "Labour's reckless £28 billion-a-year borrowing binge will not only increase debt and push up mortgage rates, but will also lead to higher taxes for all."

Labour fires back at Conservatives

Labour responded to the Treasury's claims by accusing the Conservatives of being responsible for the increase in borrowing, mortgages, and interest rates over the past 13 years. They highlighted that national debt reached its highest levels in 60 years under the Conservative government.

Government borrowing higher than expected

Data released yesterday showed that government borrowing was higher than anticipated last month. However, it was lower compared to the same month last year due to reduced spending on energy support for households. Nonetheless, the government has borrowed at least £24 billion more this financial year compared to the previous year.

Post-Brexit finance deal signed with Switzerland

Last night, Chancellor Jeremy Hunt signed a post-Brexit finance deal with Switzerland that aims to reduce red tape for financial services firms and banks. Hunt also hinted at potential tax cuts in the spring, as tax revenues hit a record high of £77.6 billion last month. However, he emphasized that the priority is to bring down inflation.

Tories buoyed by dip in inflation

Earlier this week, the Tories received positive news as inflation decreased from 4.6 percent to 3.9 percent, the lowest it has been in two years.