Bradford & Bingley ups mortgage rates

Bradford & Bingley ups rates

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Friday, 06, Jun 2008 10:37

The Bradford & Bingley bank has been forced to up mortgage rates after what has been a torrid week for the company.

On Monday the firm was forced to issue a profits warning, releasing data showing the company had fallen £8 million into the red during the first four months of the year.

It was also announced 23 per cent of the company had been sold to American investment organisation Texas Pacific Group, in an emergency search for liquidity.

Now the company has been forced to increase mortgage rates, with the cost of most new deals increasing between 0.05 per cent and 0.55 per cent from today.

It is thought the change is in response to the persistently high London Interbank Offered Rate (Libor) which has made securing wholesale funding increasingly expensive.

The Bradford & Bingley decision follows moves by Abbey and Nationwide to raise rates, and starkly illustrates the reduced role of the Bank of England in today's financial climate.

The Bank's monetary policy committee (MPC) decided to maintain interest rates at five per cent at its monthly meeting yesterday. However, Bradford & Bingley have increased rates on their products regardless.

The company also saw its chief executive Steven Crawshaw resign on Sunday, citing a "serious illness".

Chairman Rod Kent has become executive chairman in his place.

Chris O'Toole