Kwasi Kwarteng has admitted that he has a tracker mortgage for which the payments have risen “a great deal” as a result of the economic turmoil after his mini-budget.
In an interview with GB News, the former chancellor was asked whether he felt any sympathy for those affected by the rise in mortgage rates, before letting on that he was among them.
“I’m probably revealing too much, but I’m on a tracker as well,” he said. “My bills have gone up considerably.”
Last September, Kwarteng announced a slew of unfunded tax cuts that led to a loss of market confidence in the British economy, causing the pound to slump and the cost of borrowing to rise significantly. He was sacked after 38 days in the role, and Liz Truss was forced out as prime minister soon after.
But Kwarteng’s woes have not ended there. With the Bank of England steadily putting up interest rates over the past year to curb inflation, he is one of the 1.4 million people with mortgages that track the base rate. First-time buyers and those renegotiating after a fixed-term deal has ended have also been affected by the rise in interest rates.
Asked whether he had been “screwed by his own budget” by the presenter Camilla Tominey, Kwarteng said the Bank was responsible.
“The Bank of England was in charge of inflation, and my tracker rate and other people’s tracker rates will be linked to the Bank rates, and whatever margin you have to pay,” he said.
“And the reason why interest rates have gone up so high is because we’ve totally missed the goal on inflation. We’ve misjudged inflation.”
Pressed on the amount by which his payments had increased, Kwarteng said: “A lot. I’m not going to reveal [exactly how much]. A great deal. We bought the house in 2021. It’s gone up quite a bit since then and I’m as exposed to interest rates as anyone else.”
In October 2022, the Bank’s governor, Andrew Bailey, took emergency action to quell rising bond yields by buying long-dated UK government bonds, which he predicted would add to inflation and force the Bank to keep raising interest rates.
Rising bond yields is a problem affecting most advanced economies. But City analysts said Britain was an international outlier, with the country affected by a “moron premium” as global investors lost confidence in Truss and Kwarteng’s ability to manage the economy and public finances.