A NUMBER OF leading mortgage providers have pulled some of the best fixed rate deals from the market this week, reports The Scotsman.
The action follows the shock inflation rise last Tuesday which shook the City and made an imminent hike in the Bank of England bank rate almost inevitable.
“The base rate figure is expected to go up once, maybe even twice, in a very short period of time so banks are anticipating this by filtering rate changes through to their products,” says David Hollingworth, communications director at mortgage broker, London and Country. The base rate is currently set at 5.25% and is expected to rise by at least 0.25% at the start of May.
The rise in inflation has increased money market 'swap' rates, so lenders are unable to fund many of their current mortgage deals, explains Hollingworth. “But not all deals are being pulled - some are being withdrawn and re-priced in line with the changes.”
THE ROYAL BANK of Scotland consortium circling ABN Amro increased the pressure on the Dutch bank today by formally signalling its intention to launch a takeover bid which would include an offer for the American business LaSalle, reports The Times.
RBS gave notification to the Dutch regulations of its intention to bid, a necessary first step under the rules before launching an offer. RBS, with its partners Fortis Bank and Santander have said that it would not go hostile, but its latest move is a strong hint that it may go direct to shareholders with an offer.
ABN has already agreed a €65 billion merger deal with Barclays, while at the same time agreeing to sell the prized American asset LaSalle to Bank of America for about $21 billion.
LEGAL & GENERAL posted its 13th successive quarter of growth in the UK yesterday, with a 27 per cent increase in new life and pensions business compared with the same period last year, reports The Independent.
After taking more modest growth from its international businesses into account, the group's total new business rose 6 per cent year-on-year to £413m over the three months to the end of March.
The insurer's UK operation, responsible for £306m of the total, benefited from strong sales of pensions to both individuals and corporate customers, with premiums up 68 per cent.
Sales of annuities rose 27 per cent over the quarter, although L&G said it had suffered a decline in bulk annuity purchases from pension schemes. The insurer said such business was unpredictable but that it expected higher sales later in the year.
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