Mortgage Rates are falling again and the Pound surges

Graham Charles Lear
4 min readOct 29, 2022

The average rate on a two-year fixed-rate mortgage has now dropped from 6.65% to 6.50%. To put this into context for readers, I looked at the Bank of England’s figures. I went back to 2008, 14 years ago, as this is what the BoE data download gave me.

Mortgage rates are falling again

2-year fixed-rate mortgages, based on 90% of house value

  • July 2008: 6.94%
  • Oct 2022: 6.0%

[Sources: Bank of England to Sept 2022, then independent market data for Oct 2022.]

As this information shows, the current mortgage rate fixed for two years is below that in July 2008, 14 years ago.

Finally, the pound is surging again

Exchange rates are of course a function of the relative strength of each country’s currency. Recently the dollar gained in strength, partly due to the Fed’s aggressive rises in interest rates making the returns for investors better in the US. This affected the pound as well as the euro and other currencies.

In recent days the dollar has been falling. In turn, this has increased the pound-dollar exchange rate.

The pound has risen against the dollar again

The last month

  • 26 Sept 2022: $1.08
  • 25 Oct 2022: $1.15

[Source: Bank of England.]

I understand why the Prime Minister said what he said on Tuesday. The narrative is: “Liz Truss left us in a mess, it’s a disaster, but when things are better the improvement will all be down to me and my policies.”

Above I have tried to present a more nuanced picture. Liz Truss wasn’t embarked on a bold tax-cutting strategy. She was mostly saying she would not implement the tax and National Insurance rises which were coming from Rishi Sunak’s own policies before he resigned. Her entire emphasis was on growing the economy.

One of the major criticisms of Liz Truss and her Chancellor Kwasi Kwarteng was that they failed to reassure the markets with a fiscal strategy to cut spending, before announcing the ‘growth agenda’. Specifically, they were criticised for not involving the Office for Budget Responsibility (OBR) in their plans.

The supreme irony is that yesterday the new Chancellor, arch-Remainer Jeremy Hunt, announced that this very same OBR evaluation was being delayed until 17 November. In other words, nothing in the new government’s plans will be costed until then.

Perhaps the fact that the new PM used to work for Goldman Sachs might be a factor in why the markets haven’t reacted to this news….As I said I smell some fishy with our Rishi, perhaps you might smell the same fishy smell.

I would like to remind my readers that we British are in a great position since we left the EU, a far better position than any EU country will be to bounce back.

UK unemployment rate falls to 3.5% the lowest since 1974

UK exports to the EU in April, highest on record

UK exports to the EU in May, highest on Record

UK Exports to the EU in July, highest on Record

65 plus International deals better constructed for the UK’s needs, which means YOUR needs.

We are no longer forced to operate under Byzantine EU which makes procurement by the UK public authority’s a tortuous quagmire.

Our tax laws set by the UK are now better suited to our needs

We are no longer bound to EU-set VAT rules. Our Government no matter who they are can cut them or even abolish them if they wish.

We are no longer bound by EU rules on import tariffs

UK regional funding is now defined by our elected government ministers and not by some faceless EU bureaucrat that wants your councils to jump through hoops to get your own money that you have paid in tax.

The UK has restored democratic control over our lawmaking. It’s now OUR law and no one else’s law.

We have restored the UK Supreme Court as the final arbiter of the law that applies in the UK.

We have ended the acceptance of ID cards for most EU nationals travelling to the UK.

We are establishing our own subsidy regime to support British businesses and innovation.

We are Reforming our alcohol duties.

We are establishing new Trade and Investment Hubs in Scotland, Wales and Northern Ireland and a second Department for International Trade headquarters in Darlington.

We have Raised the contactless purchase limit to £100 — higher than the EU would allow.

We are removing the EU’s ‘Vnuk’ motor insurance law to prevent increased premiums (of £50 a year) for GB motorists.

Reduced the cost of holidays in Europe by introducing a zero rate of VAT.

Provided life-changing experiences and opportunities in education and training across the world through the Turing Scheme.

Banned the export of live animals for fattening and slaughter. Something we could not do by being in the EU.

Ended the abhorrent, cruel practice of puppy smuggling and low-welfare pet imports. Something we could not do by being in the EU.

Building animal welfare into our independent trade policy. Again something we could not do by being in the EU.

Became a dialogue partner of the Association of Southeast Asian Nations (ASEAN) — its first in 25 years. Again something we could not do by being in the EU.

These are just a few of the things we now can do by being out of the EU and it’s why we are in a far better position than any EU.

Sources: Bank of England |



Graham Charles Lear

What is life without a little controversy in it? Quite boring and sterile would be my answer.