UK’s Nationwide says will raise mortgage rates as markets convulse

LONDON (Reuters) -Major British mortgage lender Nationwide Building Society said it will raise the interest rates on selected new fixed-rate and tracker mortgages by up to 0.45 percentage points, with effect from Friday.

Some smaller mortgage lenders had already announced rate increases – as well as temporary product withdrawals – on Thursday in response to soaring funding costs, sparked by inflation data on Wednesday that raised bets on more Bank of England interest rate hikes this year.

“In the current economic environment swap rates have continued to fluctuate and, more recently, increase, leading to rate rises across the market. This change will ensure our mortgage rates remain sustainable,” a Nationwide spokesperson said.

Nationwide said the increases would affect products on its ‘new business’, ‘switcher’, ‘additional borrowing’ and ‘existing customer moving home’ ranges.

(Reporting by Andy Bruce and Lawrence White; editing by David Milliken)