A THIRD of British businesses are working on “exit plans” ahead of the October Budget’s rumoured tax shakeup, a survey of executives have found.

Bosses are “fast-tracking” their preparations to try and reduce the impact of a “painful” rate hike.

2

2

Advertisement

Chancellor Rachel Reeves will rise to the dispatch box on October 30, seeking to fill what ministers have called a £22 billion “black hole” in the books.

Labour has repeatedly promised not to increase the main rates of income tax, national insurance and VAT and has limited any rises in corporation tax to no higher than 25%.

As a result, ministers are looking around for other ways to raise the cash necessary to plug the “black hole”.

It has been rumoured that Ms Reeves could seek to equalise capital gains tax (CGT) with income tax as part of the Treasury’s efforts to right the financial ship,

This could see businesses handing as much as 45% of their profits in capital transactions to the Exchequer.

The rate is currently just 10% for most deals, rising to 18% on the sale of residential property.

Senior Labour figures have long pushed for equalisation, arguing that capital gains are just like any other form of income and should be taxed accordingly.

But critics maintain that such a move would disincentivise investment, drive down productivity and put the handbrake on economic growth.

A new study from wealth management company Evelyn Partners suggests that almost a third of entrepreneurs in the UK are now working on “exit plans” – up 6% from 18 months ago.

This would involve businesses selling off as many assets as possible before the Budget in order to benefit from the lower rate before the tax is potentially hiked.

Around a quarter of those asked said they had accelerated their plans to pull out of solid assets thanks to worries over CGT.

And a fifth said they had done the same due to concerns of potential cuts to inheritance tax relief.

Laura Hayward, of Evelyn Partners, said: “As opinion polls increasingly suggested a change in government and the consequential potential for tax changes was becoming more likely, an increasing number of business owners have got in touch with us to have conversations about business exits.

“The business environment for many owners has already been tough enough in recent years as they have worked hard to rebuild their businesses after the pandemic, against a backdrop of cost-of-living pressures and high inflation.

“Add to that the potential for unfavourable tax changes in the upcoming Budget and it’s completely understandable that some are hoping to realise the gains of their successes sooner rather than later.”

It comes after The Sun exclusively revealed that Ms Reeve’s top aide had hinted at higher eco-taxes being announced in the Budget.

There was also public outcry over the expected decision to reverse a 2022 cut in fuel duty, despite the Government’s pledge not to raise taxes on “working people”.

THE energy is high as my fellow party-goers, dressed in blinging club gear, and with their faces covered in glitter, fling their hands towards the sky.

Club classics are echoing around the room while powerhouse singers belt out melodies and podium dancers twist their bodies in time to the music.

4

4

Advertisement

This could easily be a thumping club night in Ibiza, but instead of heavy beats in a warehouse, we’re listening to club tunes played by stringed instruments and saxophones in a countryside setting.

I’m at Warner Leisure’s Heythrop Park for an Ibiza Sunsets break that proves you really don’t need to fork out on flights to the White Isle to party like you’re there.

For this weekend, the Oxfordshire countryside retreat was hosting DJ sets from dance aficionados Dave Pearce and Vernon Kay, reimagined anthems from 16-piece orchestra Ibiza In Symphony, and even an old-school neon party, complete with glow sticks.

Heythrop Park, a Grade II-listed former stately home, is more reminiscent of Downton Abbey than the super-clubs of San Antonio.

Although the musical welcome from a saxophonist immediately conjured up memories of the party island.

I was staying in a spacious superior room with large windows offering amazing views of the parkland and countryside setting — a little different to the seaside surroundings of many Ibiza hotels.

A more typical Warner weekend is usually itinerary-led and packed with activities, but an Ibiza Sunsets break is a more chilled affair.

There is evening entertainment spread across the three-day weekend, including DJ sets inspired by legendary San Antonio nightspot Cafe Mambo.

But the rest of the time can be spent at leisure, taking advantage of activities such as archery and clay pigeon shooting or yoga.

The first day involved a peaceful stroll around the grounds where I stumbled across a silent disco in full swing in the beach club-like Moroccan Garden.

We were ushered to join in with the stomping feet, but it turned out to be just as much fun watching the crowd quietly cutting some shapes.

With all that partying, there’s bound to be a few sore feet — and heads — so when you’re not swaying to melodies, you can fill your time with a visit to the onsite spa.

I opted for a dip in the pool and a sauna for as long as I could withstand the heat, before heading to the outside hot tubs.

Unusually for British summer time, the weather was glorious when I visited.

And without a cloud in the sky, I could almost believe I was in the Balearics.

For those in need of real TLC, optional extras at the spa include facials, mud wraps and reflexology treatments.

Stomping feet

I’d booked in for a Drift Away full-body massage which certainly eased my aching limbs and put me into a zen-like state.

Ibiza Sunsets packages include breakfasts and three-course dinners, so you will never go hungry.

The hotel’s poshest restaurant, Brasserie 32, serves refined pub fare including fish pies, beef short rib and risottos.

Or there’s the Market Kitchen, a buffet-style restaurant in the pretty orangery.

I ate there on my final evening and was serenaded by a flamenco guitarist.

Outside of the main restaurants, visitors can party the nights away in the Late Lounge bar which got everyone on their feet dancing to anthems during my stay.

4

4

Advertisement

If you prefer a more cosy atmosphere, the resort’s pub, The Travelling Duke, serves spirits, ales and ciders as well as steaks, and fish and chip dinners.

With the sun still beating down, it seemed rude not to have a drink outside on the terrace where a DJ was playing chilled Ibiza sounds that channelled the energy of the famous sunset sessions at Cafe Del Mar.

Then it was time for the final evening event — the one we had all been waiting for — as celebrated dance DJs Dave and Vernon took to the decks to transport us back 30 years to the Nineties.

And they certainly didn’t disappoint!

The Late Lounge erupted to the exhilarating sounds of Robert Miles, Darude, Faithless and many more, amid an atmosphere that could only be described as electric.

I couldn’t have been more grateful for my ultra-comfy bed at the end of the night.

Partying that hard in your fifties can be exhausting, but not when you have access to Heythrop’s plush facilities.

I could get used to this.

IT is the world’s largest fashion retailer, which has been endorsed by Khloe Kardashian and Katy Perry.

Chinese online juggernaut Shein launched 12 years ago, yet it is tipped for a historic and controversial £50billion float on the London Stock Exchange as early as this autumn — the biggest in more than a decade.

11

11

Advertisement

11

Britain’s addiction to the ultra-low cost clothing means an estimated 520,000 items are shipped a day to Brits.

Today a Sun on Sunday probe reveals how Shein, which had sales of £1.55billion in 2023 yet operates with just 33 staff in its UK arm, has been accused of exploiting a tax loophole.

According to latest figures from Companies House, the fashion giant’s pre-tax profits doubled year on year to £24.2million and it paid £5.7million in taxes, up from £2.3million the previous year.

Now rivals have slammed Shein for using “unfair” tactics to keep its prices at rock bottom, while being able to fork out on glossy adverts around the country and on the London Tube network, which carries five million passengers a day.

Shein uses the so-called “de minimis” rule, which allows shipments of less than £135 to be exempt from import duties.

Last night, one chief executive told the Sun on Sunday that the loophole was “a wheeze that saves Shein millions of pounds”.

He said: “It’s an unfair playing field — of course it is. We all have to pay duties to ship clothes to customers here. But because their shipments are individually packed, they don’t?

“At a time when the Government can’t stop talking about this £22billion hole it needs to plug, why doesn’t Chancellor Rachel Reeves go after some of these big players that are obviously not paying the right amount of tax and duties?”

Superdry founder and CEO Julian Dunkerton has previously said it would be in the UK’s interests to get rid of the loophole.

Boohoo CEO John Lyttle has also urged the Government to close it.

Last month, US President Joe Biden announced he was closing a similar loophole, which allowed imports of individual packages of up to £600, ramping up pressure for change in the UK too.

Tax expert Dan Neidle says that Shein is avoiding tax of eight per cent on footwear and 12 per cent on clothing.

This amounts to an average saving of ten per cent — as much as £155million — that the company does not have to pay in tax.

Chinese company Super Smart Service processes Shein’s UK orders, with clothes costing on average £7.90, along with other companies including Amazon and eBay from a warehouse in Cannock, Staffordshire.

Super Smart Service’s turnover has more than doubled from £23.4million in 2020 to £56million in 2023 — and its profits have also doubled from £3.5million to £7.3million over the same period.

By using this third-party logistics partner, Shein can ship directly to customers in the UK.

Multi-billionaire

It also means items are not held as stock in warehouses here, which avoids storage costs — driving down prices even further.

The company, which has switched its headquarters to Singapore to reduce the Chinese government’s influence, is only considering listing in the UK after it was told it was not welcome on the New York stock exchange.

Shein has offices in Westminster, in a building that was once the headquarters of MI6.

There is also an office in ­Manchester — the same city that is home to rivals Boohoo, PrettyLittleThing as well as Missguided, which Shein acquired last year.

Shein was founded in 2012 by Sky Xu, also known as Xu Yangtian, who is already a multi-billionaire at the age of 40.

The mysterious boss, who largely keeps a low profile, reportedly flies so under the radar that employees joke they do not recognise him at the office.

At a time when the Government can’t stop talking about this £22billion hole it needs to plug, why doesn’t Chancellor Rachel Reeves go after some of these big players that are obviously not paying the right amount of tax and duties?

Sun source

He was born in Zibo, a manufacturing city in China’s Shandong province, where his parents were workers in state-owned factories.

He went on to study international trade at Qingdao University of Science and Technology.

One person who worked with him described him as bespectacled, “shy” and a lover of golf.

He shook up the supply process by ditching the traditional method of exporting abroad.

The company, which staged celebrity-packed fundraising virtual festivals during Covid, has tech wizards who use complex algorithms to scour trends from Google, social media and online shoppers to work out what will be a fashion hit.

Clothes are then made in hundreds of factories in Panyu, a district in Guangzhou, southern China, which the retailer dominates so much the hub is called Shein Village.

Around 80 per cent of the 7,000 factories in the town work for Shein. Restaurants now serve dishes from all over China to armies of migrant workers.

The company’s own website claims it has 10,000 employees worldwide and sells to over 150 countries.

11

Advertisement

11

11

11

Instead of making large long-term orders with factories, Shein uses “low-batch ordering,” which means it will get a factory to make 100 items and only increase volumes if it sells well.

The Chinese goods are shipped to Guangzhou Airport using low-cost postal service China Post and sent to the Midlands.

Initially, factories did not want to work with the online retailer.

But when a ­product goes viral they can hit the jackpot by churning out hundreds of thousands of the same piece.

One factory manager said: “When Shein first arrived, no one wanted to work with them because the orders were too small. By 2020, everyone was working with Shein because their orders were so big.”

Its own website says “customers will receive orders via our UK Courier partners and not need to deal with any custom affairs”.

When Shein first arrived, no one wanted to work with them because the orders were too small. By 2020, everyone was working with Shein because their orders were so big

Factory manager

As well as the tax loophole, Shein has faced controversies including accusations by Stop Uyghur Genocide, which claims there is forced labour in its supply chain. The charity says Shein should be barred from listing on the London Stock Exchange.

In its 2023 Sustainability and Social Impact Report, Shein admitted two cases of child labour and temporarily suspended orders from the suppliers involved. It did not resume business until the suppliers tackled the issue.

It also admitted its carbon emmisions increased by 81 per cent between 2022 and 2023. Shein insisted it has a “zero tolerance” approach to worker mistreatment.

Liam Byrne, chairman of the Business and Trade committee, said: “We can’t allow British business and consumers to be undercut or cheated in a race to the bottom on standards, especially when there are questions about whether forced labour is being used.

“That’s why I’d like to see our new government make good on the promise made, but never delivered, by Conservatives in the 2022 Queen’s Speech, to strengthen the modern slavery act and toughen up requirements on supply chain reporting.”

Alice Price, of GlobalData, said Shein’s low-cost model and response to demand meant it can steal customers from British firms.

She said: “Shein’s burgeoning influence over the UK market is attributed to its unbeatable prices, and its rapid ability to churn out the latest micro trends on a colossal scale. This has allowed it to become a firm favourite among younger shoppers, and steal share away from other online specialists like ASOS and boohoo.com.”

Shein has previously said it complies fully with all its UK tax liabilities.

The company told the Sun on Sunday: “Shein’s success comes from our ability to produce fashionable products. We keep prices affordable through our on-demand business model and flexible supply chain. This reduces inefficiency, takes out wastage of material, and lowers our unsold inventory.

“We pass this advantage to our customers and this has driven our success around the world, not the exemptions that retailers receive under current tax regimes. We will work with policy makers and industry peers to review frameworks.”

11

11

11

Advertisement

11

HOME Bargains shoppers are racing to the store to get their hands on this family-friendly Christmas stocking filler.

For a single coin you could grab this creative collection that will keep the kids entertained for hours.

2

2

Advertisement

The Grinchmas Activity Pack includes a colouring book, activity book, write-your-own-story book, stickers and mini coloured pencils.

This bountiful bundle is on the shelves for only £1.99.

With of the activity booklets stating they contain over 30 pages each, it’s difficult to agree with the infamous antihero about hating Christmas.

The deal has has had savvy shoppers taking to social media to share the bargain with friends and posting it on saver pages.

Amongst the comments, one user tagged her friend in the post and wrote: “If you see these can you grab one?”

It’s no wonder because the exact same activity pack is for sale on eBay for £9.50 – nearly five times the price.

Even at notoriously low-priced discount store The Works, activity packs are still marked around a five to ten pounds.

With the price of Fineliners being sold at a whopping £16.50 at Tesco and coloured Sharpies marked at an eye-watering £20 at Argos, if you want to get creative perhaps Home Bargains is your best bet.

For those keen to get in the Grinchmas spirit, the activity pack isn’t the only deal that will make you green with envy.

If you want to set a Christmas day precedent, you can grab a Grinch themed doormat for £2.49 stating “I’m only here for the presents!”

You can also grab a Grinch Gingerbread Mug Hugger for £1.79 to pep up your Christmas latte.

If you’re a Grinch superfan, on the Home Bargain website there is a total of 47 Grinch-themed items ready to fill the stockings for the entire family.

These range from to The Grinch Snuggle cushion to The Grinch Dog Dental Treats

How to save money at Home Bargains

The key to nabbing the best deals at Home Bargains isn’t where to look but when.

If you manage to hit the right timing you can spot deals for as little at 69p.

Keeping an eye on the Home Bargains website will tell which offers are set to drop – like this year’s Halloween specials.

This type of seasonal stock is often offered at a reasonable price but especially afterwards.

Big price drops will happen after big public holidays like Easter and Christmas, so you can bag a bargain at a fraction of the price at these times.

IT WAS while standing under the darkened desert sky in the beautiful Neon Museum that Las Vegas finally clicked for me.

The museum’s director Aaron Berger recalled visiting the towering Luxor Hotel as a child with his father, who asked why he thought it contained the world’s first diagonal lifts (yes, you actually ascend to your room on a 35-degree angle).

4

4

Advertisement

When young Aaron gave up on guessing, his dad simply replied: “To delight you”.

And that perfectly sums up the spirit of this city — every aspect of it is geared towards joy and excitement.

Those whose only experience of Las Vegas is what they’ve seen on the cinema screen will think of vast casinos, strip clubs and heaving bars.

But there is another side to Sin City just beneath its glitzy exterior, waiting for those willing to look for it.

Take the Neon Museum as an example — at first glance the signs that make up its exhibits seem to be the glowing altars in this temple to tackiness.

Yet taked a guided tour and you discover they are the mile markers of the city’s fascinating history, shining a light on everything from Vegas’s connections with the Mob to one hotel’s brave decision to shatter the colour bar in the 1950s.

Back in the present day, though, there’s only one way to properly explore this desert oasis — and that is by eating your way around the city.

Vegas loves to borrow the best bits from around the world (see the half-scale replica of the Eiffel Tower or the actual canals in the Venetian) and its culinary scene is no different.

Highlights for me included a delightfully authentic, and gut-busting, Italian feast at Esther’s Kitchen in the Arts District, and some of the best Chinese food I’ve ever tasted at Mott 32 — think a Friday night takeaway but with a Michelin star.

And for a real taste of the city’s soul, I’d recommend letting Secret Food Tours whizz you through a mystery selection of restaurants, each with their own unique role in its history.

Over the course of an afternoon, you can enjoy a selection of treats from lesser-known eateries to give you a true flavour of the place.

As for where to stay, there are endless glitzy hotels, with owners famously fond of blowing up underperforming sites and rebuilding in their place.

Indeed, during my stay alone I heard of two that were scheduled for demolition in the next few months.

For the classic Las Vegas Strip experience, you can’t go far wrong with Caesars Palace.

An institution here since it opened in 1966, Caesars won’t break the bank (with rooms from around £70 per night) and it’s only a 15-minute walk from just about anything in the city centre.

It boasts a host of restaurants, including branches operated by star chefs like Gordon Ramsay and Bobby Flay, as well as a stunning, Greek mythology-themed shopping mall.

And for some variety you can always stroll to other nearby hotels for a bite, all home to equally impressive restaurants, as well as next door to watch the world-famous Bellagio fountain display.

Guests of Caesars can also take advantage of a well-equipped gym, a spa, Roman baths and a wellness centre — you can even have some light cosmetic procedures done if they take your fancy.

Just bear in mind that some of these cost extra and there were a couple of payment mishaps while I was there (including one person in my group being incorrectly charged more than £650) but these were handled professionally and, as far as I’ve heard, refunded promptly.

Get out and go wild

However, if you fancy stationing yourself Downtown instead — where many of the older, original casinos sit — the Main Street Station Hotel is a top pick.

It’s built on the site of the original railway station and its former owner had a fascination with antiques and interesting knick-knacks, leaving it as a sort of residential museum today.

Highlights include Sir Winston Churchill’s snooker table, a Pullman railway coach converted into a cigar lounge and a section of the Berlin Wall set behind the urinals in the gents’ loos.

Sitting right at the heart of the busy Freemont Street, the area is a firm favourite with Vegas natives — as a nightlife hub at more affordable rates than you might find on the main strip.

The main thing to know about Vegas is that there’s always something happening, some reason to get out and go wild — but what about those looking for a bit more peace and solitude?

Well, you can get that here too.

4

4

It’s one of the perks of a city built in the middle of nowhere.

A short ride out of town and you’ll hit the gorgeous wilderness of the Old West.

What happened in Vegas isn’t necessarily staying there, but after seeing those landscapes I sure wish I could

Firms such as Pink Jeep Tours will take you out to the Valley of Fire State Park, named for its towers of blazing red sandstone.

Standing out in the Mojave Desert, you could almost have no idea that one of the world’s most densely populated cities is a matter of miles way.

It is the perfect break from the hubbub of central Las Vegas, as you take in sights such as the eerily beautiful petroglyphs carved into the rock by native tribes, some of which are estimated to be thousands of years old.

And on cooler days, you can even make your way along a trail to a model Spanish town used as a set in the classic 1966 film The Professionals.

What happened in Vegas isn’t necessarily staying there, but after seeing those landscapes I sure wish I could.

HOME insurance costs are rocketing.

This is due to soaring inflation, and the costs of repairs after a wave of storms last year.

6

Money rights expert Martyn James says: “Premiums have been rocketing and it’s important to have cover in place in case the worst happens, but with a few simple tricks you can lower the cost while still keeping your property and belongings protected.”

Laura Miller explains how savvy tricks can cut the cost of cover . . . 

THE average home insurance quote rose by almost 28 per cent in the year to the end of July.

That is the shock revelation of the latest Consumer Intelligence Home Insurance Price Index.

Combined buildings-and-contents premiums paid by customers have climbed to on average £375 a year, and buildings-only cover to £298 while contents-only cover has stayed at £132, the Association of British Insurers (ABI) reports.

All regions have seen quotes soar, from a 34-per-cent jump in London to 22 per cent in the West Midlands, data analysts Consumer Intelligence say.

Inflation, and 2023 being the busiest year on record for weather-related home insurance claims, are to blame, says ABI.

Storms Babet, Ciaran and Debi in the final three months of last year caused £352million of damage to homes.

Homeowners now looking for buildings and contents insurance on a budget should shop around for the best deal.

But if you still feel priced out, these tips can help cut the cost . . . 

DON’T OVERESTIMATE

6

THIS often happens with buildings insurance.

Many homeowners make the mistake of insuring their property for its market value, rather than the rebuild cost, and end up paying over the odds for their premium,” says Anna McEntee, insurance expert at Compare the Market.

The ABI rebuild calculator at abi.bcis.co.uk can help.

Equally, when you take out contents insurance, be as accurate as you can — if you overestimate, you’ll pay too much.

Aviva’s free home contents value calculator, at aviva.co.uk, can help you estimate the cover you’re likely to need, based on what you own.

GET A COMBINED POLICY

“IF you get a combined buildings- and-contents policy, the insurer might give you a discount,” says McEntee.

It’s worth doing research and getting quotes for both individual and combined policies to see how they compare.

DON’T DOUBLE UP ON COVER

 MAYBE your bank account includes mobile phone cover? Perhaps you took out insurance on your tablet or laptop when you bought them, or have a gadget insurance policy?

If you find yourself with separate policies covering the same thing, you could save by cancelling the duplicate cover.

JOIN A NEIGHBOURHOOD WATCH SCHEME

SOME insurance providers offer discounts for members of these schemes.

“This is because you’re taking active steps to reduce the likelihood of needing to make an insurance claim,” says McEntee.

KEEP AN EYE ON TALL TREES

6

WHY on earth might this be? Because tall trees around your home increase the risk of its foundations becoming unstable or your roof getting damaged.

It’s a good idea to make sure trees are regularly pruned. You should expect to pay from £100 to £150 for pruning a small tree and something like £500 for a larger one, says trade website My Local Toolbox.

The average premium paid for a home insurance policy where a falling tree was listed as the only previous claim was £357, compared with £183 where there were no previous claims, says price comparison site Go Compare.

CHECK YOUR HOME’S FLOOD RISK

6

YOU can find this out from the Environment Agency.

Garin Cole, home product manager at Aviva, says: “If your home is at risk, ask your insurer if they are part of the Flood Re scheme, which was set up to help homeowners in high-risk areas to access flood insurance.”

BOOST YOUR HOME’S SECURITY

6

CONSIDER adding high-quality locks to your doors and windows and installing a burglar alarm.

McEntee advises: “If you have approved security and safety systems in place, your insurance provider might consider lowering your premium.”

Among 11 common home security brands reviewed by data analysis site CrimeRate in 2024, the price range runs from £120 for DIY bell-only home alarms up to £1,139 for fully equipped smart security systems with professional installation.

AVOID PAYING IN INSTALMENTS

PAYING your premium up front, in one go, usually cuts the cost of home insurance. If you opt to pay in monthly instalments, you might be charged interest on top.

INCREASE YOUR EXCESS

“IF you’re willing to raise the amount that you contribute towards a claim, the excess, you’ll usually pay a lower premium,” advises McEntee.

BUILD UP A NO-CLAIMS DISCOUNT

IF you don’t claim on your home insurance, you could be rewarded with a discount on your next premium. The longer you go without claiming, the more you can save.

McEntee advises: “You’re likely to be able to carry over the discount if you switch to another insurance provider, so make sure to include this when looking for a quote.”

CONSIDER A MULTI-YEAR FIXED DEAL

WHILE loyalty doesn’t always pay, and it helps to shop around for the best deals each year, if you prefer a bit of stability consider a multi-year fixed-rate deal, suggests Pete Mugleston, mortgage expert at Online Mortgage Advisor.

He says: “This can protect you from price hikes for the duration of your policy.”

DO A COMPARISON

FIFTY one per cent of customers could have achieved a saving of £225 on their buildings and contents insurance through Compare the Market, based on independent research by Consumer Intelligence during June 2024, so it is always well worth checking out what comparison sites offer.

TAXMAN CLOBBERS ELDERLY

Advertisement

TENS of thousands of OAPs are set to get tax demands this year for the first time since they retired.

A freedom of information request by LCP Partners revealed nearly 700,000 have been asked by HMRC to pay tax on their pensions. This was an increase of over 120,000 people compared with two years earlier.

One reason given for the rise is the year-on-year freeze in the value of tax-free personal allowance, coupled with a steady increase in the value of the state pension.

The personal allowance threshold, which is the salary point at which people start paying tax, has been frozen at £12,570 since April 2021.

Steve Webb, partner at pension consultants LCP and former Pensions Minster, told The Sun the “long-term freeze” of the personal allowance could be financially damaging for pensioners.

Advertisement

He said: “Although an average bill of £665 may not sound very large, it could be the equivalent of about three weeks’ pension, and a pensioner whose income is only just above the tax threshold may not have such a sum readily available”.

He predicts the number of retirees getting tax demands could rise further over the coming years due to the pensions triple lock – which means the payment rises every April by the highest out of inflation, the average UK wage increase or 2.5 per cent.

Markets still do not know what the pension rise will be but inflation figures released next week should give an indication.

MORTGAGE RATES ARE UP

6

Advertisement

BORROWERS could face a surge in mortgage costs as some lenders increase rates and withdraw their cheapest deals.

Coventry Building Society, Co-operative Bank, Molo, and LiveMore have all either raised rates or pulled their best fixed-rate offers from the market.

Prior to these latest changes, Coventry offered a 3.69 per cent five-year fixed-rate mortgage, one of the lowest rates on the market.

Interest rates on home loans had been on a downward trend with many homeowners and buyers expecting further reductions in the coming months.

However, David Hollingworth, Associate Director at L&C Mortgages, warns: “Fixed rate pricing depends on market expectations for interest rates, and current uncertainty over the forthcoming Budget, mixed messages from the Bank of England, and global unrest are pushing costs back up.”

Swap rates, which indicate market expectations for future interest rates, have been rising. These directly impact the cost of fixed-rate mortgages and lenders will look to increase their rates so that they don’t lose out.

The two-year swap rate was 4.06 per cent as of October 7, while the five-year swap rate was 3.81 per cent, according to Chatham Financial. In September, the respective rates were 3.91 per cent and 3.56 per cent.

Swap rates will remain uncertain until the BofE decides whether to cut interest rates from 5 per cent on November 7.