Chancellor Talks Down Prospect Of Mortgage Relief, 'Would Be Inflationary'

Chancellor of the Exchequer Jeremy Hunt has been answering Treasury Questions in the House of Commons. Following the sharp rise in UK mortgage rates and the broad market expectations for further hikes to the base rate from the BoE, there has been increasing media speculation that the gov't could intervene to offer relief to homeowners.

• Jason Groves at the Daily Mail records the question posed to Hunt: "Former Tory chairman Sir Jake Berry calls on Jeremy Hunt to introduce mortgage interest relief to help homeowners facing a 'mortgage bomb',[...] Jeremy Hunt insists mortgage bail-out not under consideration, telling MPs: 'These kind of schemes right now would be inflationary and we won't do anything that will prolong inflation'.
• Despite Hunt's denials, the calls for some form of gov't relief are only likely to grow louder in the coming months with rate rises projected to continue for some time.
• While the next election is not likely until autumn 2024 given that PM Rishi Sunak's centre-right Conservatives trail the centre-left Labour party in opinion polls, there is the prospect the gov't steps in as it attempts to boost its flagging support levels. This in turn would have a notable impact on UK public finances heading into the election period.