Mortgage lender rate rises 'surprising'

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Increases in rates offered by mortgage lenders have been described as "surprising", by an economic research company.

Capital Economics' UK economist Paul Dales added he was surprised how widespread the increases have been, as well as how many lenders have had to pull certain mortgage deals.

The expert also stated that he felt some mortgage lenders were not cutting their rates because they are subjected to higher funding costs from the wholesale market.

"It does seem to me that the ones who are raising their costs are doing it because they have to, rather than purely to maximise profit and take advantage of the current situation," he explained.

However, Mr Dales went on to add that people who feel it is unfair that some lenders are not reducing their rates probably just think they are trying to make a profit, which could be true "to a certain degree", as it is why they exist.

Established in 1999, Capital Economics is one of the leading research consultancies in the UK.

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