What next for interest rates and how bad will it get for mortgages?

In this episode of the This is Money Podcast, hosts Georgie Frost, Simon Lambert, and Lee Boyce discuss recent trends in UK interest rates, which have remained stable at 3.75% for nine months. Despite the Bank of England’s decision to hold rates, mortgage rates are on the rise, with five-year fixed rates now at their highest since 2023, primarily due to increases in swap rates used by banks. Economic pressures such as potential energy price hikes and the rising cost of living are creating a ‘blanket of gloom’ for households.

The podcast also highlights the best savings accounts available, with fixed savings rates climbing above 5%. Lee shares insights on the advantages of locking in rates and the fact that many people are still keeping cash in low-interest current accounts. The episode further explores the bond market, detailing how gilts can provide attractive yields and are increasingly being considered by investors.

A segment on inheritance tax is included, outlining issues arising as estate values climb, particularly for those whose estates exceed £2 million. Finally, the conversation shifts to whether relocating to countries like Greece could be beneficial for high earners seeking lower tax burdens, with practical advice for those considering such a move.