Cost of living - latest: 778 mortgage deals pulled in a week (2023)

Key points
  • Hundreds of residential mortgage deals withdrawn as interest rate predictions rise
  • Buy-to-let mortgage deals also disappear
  • Expert gives advice for those concerned about affording their mortgage
  • Lurpak gets backlash after cutting size of block of butter
  • 'Dummy' coffee a 'bleak' symptom of cost of living crisis
  • Who's making money from rising food prices?
  • Your dilemmas:I am paying my dad's mortgage, how do I get added on formally?
  • Budgeting Mum: Saving for your children | Do food subscriptions save you money?| Holiday spending money| Best broadband deals


Amazon UK to offer parents term-time only contracts

Amazon UK has announced that it will offer some employees working in its warehouses the opportunity to work only during term time in an effort to address the ongoing dispute over pay and conditions with the GMB union.

The offer will apply to parents, grandparents, or guardians.

The new contracts will provide six weeks of holiday during the summer and two weeks over the Easter and Christmas breaks, giving eligible employees full-time benefits.

The online giant is hoping that this move will attract more people back into the workforce, following the recent launch of a part-time contract with flexible shift options.


Expert gives his advice for those worried they can't afford their mortgage

As we have been discussing through the day, mortgage rates - which had been steadily declining through this year - are now ticking back up on expectations the Bank of England rate could hit 5.5% in November.

Here David Hollingworth, associate director at L&C Mortgages, one of the UK's leading mortgage brokers, gives his advice for those worried about increased mortgages costs.

1) Review your rate

"The recent base rate rise and potential for more to come has seen some fixed rates tick up again, but borrowers can secure a rate well before their current deal is due to end with most lender offers valid for up to six months."

2) Extend your mortgage term

"This isn't a decision to take lightly as lengthening the mortgage term will come with a cost. However, it could be a useful measure for managing budgets in the near term, to help adjust to the higher costs that come not only with higher mortgage rates but also general cost of living."

3) Consider interest only

"Interest only could look attractive to reduce the monthly payment but it's also important to have a repayment plan in place. Reducing payments comes at the expense of reducing the mortgage amount gradually over time and switching back to repayment could only get harder over time."

4) Payment holidays

"Payment holidays could be a useful short term measure to cover a difficult time that should come to an end in the foreseeable future. For example, where a new job has been secured but not yet started. Remember that the interest will be added to the mortgage so there's a longer term cost."

5) Review other debts

"Consolidating debt into the mortgage could slash the rate of interest and reduce the outgoing but it needs to be approached with care. This could turn short term debt into a long term commitment, which could ultimately end up costing more."

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6) Talk to your lender

"Lenders will want to consider solutions they could deploy to help avoid borrowers falling into bigger problems. Debt charities will also be able to help with information on how best to proceed and get back on track, rather than falling into greater difficulty."


More than 400 buy-to-let mortgage deals pulled in last week

This morning we brought you news that 373 residential mortgage deals had been withdrawn in the last week on fears of more interest rate hikes. Now we have the same figures from the buy-to-let market and they're even more stark.

At least 405 buy-to-let mortgage deals have been pulled from the market in the last week, according to Moneyfacts.

The number of available deals has fallen from 2,748 to 2,343 since last Monday.

At the same time, the average rate on a two and five-year fixed offer has risen to 5.61% and 5.52% since the start of May, it added.

Precise Mortgages, Kensington, Kent Reliance, Hodge and Marsden Building Society have pulled selected fixed mortgage products over the past few days.

Aldermore, Bank of Ireland UK, CHL Mortgages, Fleet Mortgages, Foundation Home Loans and The Mortgage Lender have pulled their entire fixed rate range.

Rachel Springall, a Moneyfacts finance expert, said:

"Landlords will be disappointed. The volatility surrounding interest rates towards the tail end of 2022 started to improve, but as it stands, average rates are expected to keep climbing because of the ongoing concerns over future interest rate hikes.

"Buy-to-let product choice dropped below 1,000 deals in October last year, in the aftermath of the fiscal announcement, so it will be a concerning echo of that period if choice plummets to such a low again."


Asda to buy petrol station giant - here's what it could mean for fuel prices

The owners of Asda are set to buy petrol station operator EG Group's UK and Ireland business in a £2.27bn deal.

The move will mean the UK's third-largest supermarket will acquire 350 petrol stations and more than 1,000 food-to-go-locations.

It could also mean good news for drivers, with Asda's co-owner saying it will bring the company's "highly competitive fuel offer" to more customers.

Asda does offer petrol and diesel at some of the lowest prices on the market.

Despite this, the GMB union has raised concerns that the tie-up could actually increase fuel prices, and threaten food supplies.

"This merger is wrong on so many levels - it is wrong for consumers and will increase food prices, it is wrong for drivers with a chilling effect on fuel prices, it is wrong for Asda's workers and it is wrong for Asda's business," Nadine Houghton, GMB's national officer, said.

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Here's a look at the latest fuel prices:


Round-up: Three top stories from our business page

While we continue to bring you the latest cost of living updates, why not take a look at some of today's top business stories...

Pubs, bars and restaurants are pleading for the government to help with their energy bills after they surged by 81% in the last year.

The board of the CBI hasdrafted in lawyers to preparefor a prospective insolvency filing ahead of a crunch vote by thousands of its members next week.

And Mars bars are getting a new look as they trial a more environmentally friendly paper wrapper instead of a plastic one.


Lurpak gets backlash after cutting size of block of butter

Lurpak has made headlines a few times throughout the cost of living crisis - and we're there again.

Shoppers are complaining online after the butter brand's owner Arla Foods cut the size of a block by 20% from 250g to 200g, despite its now infamously high price.

The cheapest 200g pack of Lurpak slightly salted butter is £1.90 (95p per 100g), according to analysts, while the cheapest 250g pack was £2.45 (98p per pack).

The company has made the same move with Anchor butter as well.

The response has been...

"Lurpak and Anchor are really making us work for our butter now, aren't they? First they hike the prices, and now they shrink the size. What's next, a subscription service?" wrote on Twitter user.

Arla Foods has been phasing out its 250g packs since last month.

"We're aware that the cost of living crisis has put pressure on shoppers' available spend, and we want to make our price points more accessible for shoppers, which we believe can be achieved, by reducing our pack sizes," Danny Micklethwaite, the company's vice president of marketing, told Sky News.

He explained that the price is set by retailers that stock the product, adding that Arla Foods works "extremely closely" with them to get the "best possible" deal for customers.


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Sainsbury's slashes prices of 40 dairy products

As we told you earlier, dairy products such as milk and cheese have been some of the worst-hit food areas when it comes to rising prices, with shoppers paying almost 30% more than a year ago.

Now, it what seems to be positive news for customers, Sainsbury's says it is cutting the prices of more than 40 own-brand dairy products by up to 60%.

Here are some of the deals available:

"With the rate of grocery inflation remaining at a record high, we want to do everything we can to help our customers manage their budgets and keep prices low on the products they buy most often," Rhian Bartlett, the supermarket's food commercial director, said.

From tomorrow, Nectar customers can get extra discounts on a number of branded dairy items, including:

  • Lurpak 500g - normally £5 now £3.75
  • Philadelphia 165g - normally £2.20 now £1
  • Cathedral City cheese 350g - normally £4.75 now £2.75


Asda chairman 'hopeful' UK has hit food inflation peak - and says government owes supermarkets 'debt of gratitude'

Asda's chairman has said he is "hopeful" the UK has hit the peak of food inflation, as he warned that reports of price caps being introduced on food are "backward looking".

Food price inflation in the UK was 15.4% in the year to May, according to figures from the British Retail Consortium, a slower rate than the record seen in April, but still a major factor in the stubborn rate of overall inflation.

Speaking to Sky News, Stuart Rose said the country would "steadily see a decline" in food prices now, despite a predicted quick fall failing to materialise.

"All retailers are very efficient. In real terms, the cost of food, the cost of clothing, the cost of electronics has come down over the last 20, 30, 40 years largely due to the efficiency of retailers," he said.

His comments come after reports emerged that supermarkets will be encouraged to introduce voluntary price caps on essentials such as milk and bread to help customers cope with the cost of living.

"Governments of any complexion owe us a debt of gratitude, and this recent speculation over the last couple of days about fixing prices is, frankly, rather backward looking," he said.

"It reminds me of a prices of incomes policy that we used to have in the late Sixties."

Prices and incomes policies are used by governments to set the rate of increase in prices and the rate of wage increases in the economy, and were used in different forms in the 1960s and 1970s.

Since then the policy have been largely discredited and abandoned.

Read our full report on this story here...


New savings account 'the highest rate we've seen in years'

Savers might be enticed by a new two-year fixed deal that has just come on the market, with the provider offering a rate of 5.15%.

"It's the highest rate we've seen in years," MoneySavingExpert said.

Investec via Raisin offers the rate with interest paid at maturity, and is giving new customers to the online saving platform £25 when putting away £10,000 or more.

A minimum £1,000 deposit is required to open the account.

It comes as savers have been urged to switch accounts due to earning "meagre" returns despite an increase in the Bank of England base rate.

In recent months, savers have been sitting on rates as low as 0.1%, even though the Bank's base rate has been set at 4.5%, according to Which?.

Some account holders may be better off with challenger banks or building societies, particularly when it comes to instant access deals, the consumer group said.

Banks consider a number of factors when setting their interest rates, and the Bank of England's Base rate is just one of them, a blog on UK Finance's website explained.

Several providers have recently announced new savings deals, here are some of them...

First Direct is launching a one-year fixed-rate savings account with a rate of 4.60% AER (annual equivalent rate), from today.

The deal is only available to First Direct customers with a 1st account current account. The bank is offering £175 cash to switch to its current account, subject to terms and conditions.

Shawbrook launched a one-year fixed-rate bond paying 5.06% AER and a one-year fixed-rate Isa at 4.43% AER.

Hampshire Trust Bank is offering a two-year fixed saving account with a 5.15% rate, and interest paid either annually or at maturity. Customers need a minimum £1 deposit to open the account.

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Hundreds of mortgage deals pulled on interest rate fears

There are 373 fewer mortgage deals on the market today than at the start of last week, according to the Moneyfacts financial information website.

Products have started to disappear since the inflation figures came in higher than expected last Wednesday - prompting forecasts for where interest rates will peak to rise from 4.75% to 5.5%, expected this autumn.

Moneyfacts says there were 5,385 deals available last Monday - today that figure is 5,012.

These lenders have pulled selected deals in the last few days: Bank of Ireland UK, Bath Building Society, Furness Building Society, Newcastle Building Society, Halifax, Hinckley & Rugby Building Society, Hodge, Kensington, LendInvest, Marsden Building Society, MPowered Mortgages, Principality Building Society, Scottish Building Society and Vernon Building Society pulled selected fixed mortgage products over the past few days.

Meanwhile, Aldermore, Foundation Home Loans and Tipton & Coseley Building Society have pulled their entire fixed rate range.

We are also seeing the rates being offered on the high street creep up again - remember, these always tend to be higher than the Bank rate (currently 4.5%) as lenders are giving out loans for the long term and pricing in what they expect to happen.

The average two-year fixed deal today is 5.38% - up from 5.34% at the start of last week.

For five-year fixed deals, it's now 5.05% - up from 5.01%.

Rachel Springall, finance expert at Moneyfacts, said:

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"Borrowers searching for a new deal may well be concerned about the latest developments in the mortgage market. This volatility is down to the concerns surrounding future interest rate hikes. It is vital borrowers seek advice to assess the situation and to find a mortgage that suits their circumstances."


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