Money blog: HSBC announces mortgage rate increases (2024)

Royal Mail's incoming owner has refused to rule out stamp price hikes under his leadership.

In fact, Czech billionaire Daniel Kretinsky seemed to suggest there might be more increases to come.

"I can't make unconditional commitments," he told The Times when questioned on the topic.

"[If] your circulation is 50% of what it was … you either need to go home, or you need to increase the unit price and hope that people will pay for it. Because if not, you are making losses.

"You can be loss-making for a year or two, but you can't be in a loss for 20 years. It's simple maths. There's no mystery to it."

First class stamp prices have more than doubled since 2018 from 67p to £1.35.

The businessman, nicknamed the Czech Sphinx, had his £3.6bn offer accepted by the postal service's parent company, International Distribution Services, last week.

It said the agreement included a series of "contractual commitments" to protect public service aspects of the Royal Mail - such as its universal service obligation to "one-price-goes-anywhere" first-class post six days a week.

Many were shocked by the deal, with Royal Mail reporting losses of £1m a day in recent years.

You can read more about the Czech Sphinx below...

A major error that meant 500,000 families did not receive their scheduled child benefit today has been "fixed", HMRC has said.

In a post on X, HMRC said affected families would get the money on Wednesday morning, two days after the payments were due...

Multiple readers have got in touch to say they had been affected by the problem, which meant almost a third of payments scheduled for today were not made.

ReaderSusan1984 said: "When should we expect to receive the missing payment? This has left not just me but so many more families with kids completely stuck for food and fuel this morning."

Earlier, HMRC apologised and said it was working urgently to resolve the issue, which would not affected payments scheduled for tomorrow (see post at 14.41).

Child benefit is usually paid every four weeks on a Monday or a Tuesday at a rate of £25.60 for an eldest or only child and £16.95 for each additional child.

The bank has today announced wholesale rate hikes across its residential and buy-to-let mortgage product ranges.

The new rates, which come into effect tomorrow, will be applied largely across its two, three and five-year fixed rates for purchase and remortgage.

However, a number of rates available to existing HSBC customers looking to switch will also see increases.

Brokers say more lenders could increase rates this week.

This is thanks to an uptick in swap rates due to hopes fading for a cut to the base rate set by the Bank of England in June.

Here is what some industry insiders told Newspage...

The dreaded 'higher for longer' scenario is no longer a mere notion: it's the harsh reality for many. It looks like these elevated rates are here to stay for the foreseeable future.

Ranald Mitchell, director at Charwin Private Clients

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We can now expect more awkward conversations with clients who have read that rates are coming down and inflation is under control. HSBC have been fairly competitive recently so the hope is that they just need to turn the tap off a little to catch up and this isn't an upward trend that will continue into the summer period.

David Stirling, independent financial advisor at Mint Mortgages and Protection

HSBC is one of several lenders to already have announced changes this week. Even with the higher rates on offer, I would not suggest waiting in the hope of a drop any time soon. My advice to borrowers is take control of the situation and start the process of arranging a new deal as early as possible, secure a rate and, if a better one materialises, change to it.

Simon Bridgland, broker/director at Release Freedom

Child benefit payments have not arrived on time for approximately half a million people.

Almost a third of payments scheduled for today were not made - and we've had multiple readers get in touch to say they've been impacted.

HM Revenue and Customs (HMRC) has apologised and said it is working urgently to resolve the issue.

"We're sorry that some customers' child benefit payments have not arrived as scheduled and we are working urgently to resolve the issue," said an HMRC spokesperson.

"The issues that caused payment problems today will not impact payments scheduled for tomorrow."

Child benefit is usually paid every four weeks on a Monday or a Tuesday at a rate of £25.60 for an eldest or only child and £16.95 per additional child.

Some people may receive the benefit weekly, for example if they are a single parent or receiving certain other benefits, such as universal credit.

HMRC added on X that there was "no need for customers to call us" and it will provide updates on the social media platform.

As of August 2023, 6.91 million families were in receipt of child benefit payments.

Reader Sam E said: "No warning, complete denial, no update, just endless worry for those who rely on the benefit. The denial in particular is an insult. How long will it be until it's sorted?"

Last week, the Scottish Parliament passed a bill meaning local authorities can set an additional charge for overnight accommodation.

For tourists heading to Scotland, that means an extra fee for staying hotels, bed and breakfasts and holiday lets.

According to Visitor Levy (Scotland) Bill, the fee will be a percentage of the cost of a hotel or other room.

For instance, a 1% levy on a £200 booking means a visitor would pay £2 in tourist tax.

We asked our followers in LinkedIn if the tourist tax would put them off visiting the country.

The majority of them (59%) said it wouldn't stop them from taking a trip there - but 41% would think twice.

Any charges or levies are not expected to come into effect until spring 2026, as councils need to consult local businesses before carrying out an 18-month implementation period.

Those receiving disability benefits will not pay any charges, with children and young people also exempt.

Manchester, Bournemouth, Christchurch and Poole already charge people to stay the night.

Manchester's £1-a-night City Visitor Charge was introduced last April, and is estimated to have raised around £2.8m in its first year.

European hotspots like Barcelona and Venice also have tourist taxes, with the Spanish city charging visitors €3.25 if they're staying in official accommodation.

Your comments on LinkedIn:

"We love Scotland (I'm a Scot) but live close enough to drive up and do some shopping and stay over for a meal etc and we do so perhaps every six weeks or so. So I'm now classed as a 'tourist' even though I spend about £200 on a room - perhaps another £200 quid on a meal and drinks etc etc - not to mention the money we spend in the shops. And they want to charge us both £2.50 a night?"

Paul Mclean

Many countries apply tourist taxes, so why should Scotland be any different?The big questions, for me, are how will the money be spent? Will it be spent directly benefiting the city or just vanish into government coffers? The other is who counts as a tourist. A foreign national visiting from a country outside of the UK would seem a sensible definition, but to charge domestic visitors would probably be shootings themselves in the foot somewhat.

Scott Taylor-Barr

From my experience, Edinburgh is already one of the most expensive cities to visit.

Greig Cahill

Hopefully the contributions are put towards the development of tourism, and/or will be used in the right ways. From my experience working in France, French nationals are very accepting of the tourist tax and in France, I see the logic in it. Let's hope it works... 🤞🏻

Jennifer Wightman

Virgin Atlantic has launched the first flight of its new service from Manchester to Las Vegas today.

It makes Manchester Airport the only place outside of London to offer direct flights to America's west coast.

Virgin Atlantic already has a daily connection to Sin City from London Heathrow, but launched the new route to support strong customer demand in the North West.

It marks the airline's fourth service from Manchester to the US, building on established services of Orlando, New York and Atlanta.

"Few places sum up the glitz and glamour of international travel like Las Vegas. Giving passengers in the North the opportunity to fly there directly and experience everything it has to offer is a real game-changer," Chris Woodroofe, managing director at Manchester Airport said.

The launch has been marked with showgirls joining the flight's cabin crew and welcoming flyers at the check-in desk.

Flight VS85 on an A350-1000 departed Manchester Airport at 9.50am.

Rolex has increased the price of some of its watches in the UK after the cost of gold surged.

The leading luxury watch manufacturer has hiked some prices by as much as 4%.

One of its most famous pieces, the Daytona chronograph, will now cost you £38,700 - up from £37,200.

The price of a yellow golf GMT Master II has also increased from £34,000 to £35,400.

That's according to information on its UK website, which is tracked by Bloomberg.

Typically, Rolex raises prices for its watches annually in January.

It increased prices in the UK by about 4% for some models at that time but left US prices unchanged.

It comes after the price of gold reached record highs earlier this year, coming in at £1,932.44 per ounce in April.

Increased prices isn't the only thing that makes buying a Rolex difficult, though.

Despite high prices, waiting lists for them have been rising, according to Watches of Switzerland.

Some waiting lists can be years long, which is part of the reason they are so exclusive.

So even if you have a spare £35,000, you might still find it difficult to actually get your hands on one.

By Sarah Taaffe-Maguire, business reporter

Eyes were fixed on the London Stock Exchange today for detail on a company that isn't even listed.

Chinese-founded fast fashion giant Shein is set to publicly list in London, according to Sky's Mark Kleinman, a move that would make it the most high-profile public flotation for more than a decade and the second biggest initial public offering (IPO) in the history of the London Stock Exchange.

A company "floats" when it offers shares on a stock market - comes into public shareholder ownership from being private - with an IPO being the first time shares are publicly available for purchase.

There was no update posted this morning, but an announcement could come later this week or month.

Drugs company GSK is the worst performer of the morning with its share price down 9.4% following news it will face jury trials in claims by thousands of people with cancer who say a heartburn drug it developed, Zantac, caused their illness.

Sterling buys €1.1714, down from the 19-month high of last week. Another high could be reached as the European Central Bank will likely cut interest rates on Thursday. One pound equals $1.2732.

A barrel of Brent crude, the benchmark oil price, is $81.43, low by the standards of the past three months.

GameStop shares have surged after a Reddit account that drove the 2021 meme stock mania shared its position in the video game retailer.

The chain's shares were 90% higher at $46 each as of 9.11am after Keith Gill,who goes by DeepF------Value on Reddit and Roaring Kitty on YouTube and X, reappeared online on Sunday night.

He posted a screenshot of what appeared to be his portfolio holding a significant amount of GameStop common shares and call options.

Reminder: A call option is basically a contract which allows a buyer to purchase stock at a specific price until a certain date.

The Reddit trading crowd's favourite trader holds five million shares of GameStop worth $115.7m as of Friday's closing price, according to the account screenshot.

The account also showed a position of 120,000 call options in GameStop with a strike price of $20 that expire on 21 June that were purchased for about $5.68 each.

GameStop shares closed Friday at $23.14.

Mr Gill's first return to social media three weeks ago sparked an eye-popping rally in GameStop with shares more than doubling in May alone.

At the time, he simply posted a picture of a man in a chair leaning forward, but that was enough to trigger a buying frenzy among amateur traders.

The investor was a former marketer for Massachusetts Mutual Life Insurance.

In 2021, through YouTube videos and Reddit posts, he encouraged a band of retail traders to squeeze out short selling hedge funds in GameStop.

The action got so wild at one point that brokers had to restrict trading in the stock as it blew up their clearing house margin.

By Katie Williams, Money team

We've all learned how to be more conservative with our money amid an increase in the cost of living - but it's still important to treat ourselves now and again.

And there's some science behind that happy feeling you get when you make a new purchase, asconsumer psychologist Dr Cathrine Jansson-Boydexplains in the first of four features on the psychology of shopping running this week.

What happens to our brains?

When we buy something, our brain releases endorphins and dopamine. Such a release can give us a sense of pleasure, albeit momentarily, Dr Jansson-Boyd says.

You might be more likely to continue buying things if you think that temporary feeling of pleasure is important, she adds, though she notes for some even just the experience of shopping can trigger the dopamine, without anything being bought.

Buying sale items increases dopamine

Dr Jansson-Boyd says purchasing items at a reduced price can increase your dopamine level.

When shoppers see a product they like with a price they perceive as "fair", they experience a level of satisfaction in the part of the brain associated with the anticipation of pleasure, she explains.

However, if the price is perceived as "unfair", the insula - a part of the brain that registers pain - is typically activated.

The negative impact of dopamine

It's also important to note dopamine can have negative influence on spending behaviours, Dr Jansson-Boyd says.

For example, when buying chocolates, the release of dopamine generates what can be thought of as a reward-seeking loop.

This means that a person experiences repeated craving of a dopamine rush and repeatedly buys chocolates to experience the dopamine rush. This can lead to unwanted spending.

"As you can imagine, such 'craving' can also lead to fairly serious consequences if the spending is done on gambling or drugs," she adds.

So are there 'healthier' alternatives to get that release?

As Dr Jansson-Boyd mentioned previously, window shopping can trigger a surge of dopamine without you needing to buy anything.

Other non-shopping activities such as eating healthily and listening to your favourite music can also trigger a similar release, she says.

Can you get out of chasing the dopamine rush?

Being aware is a good start, says Dr Jansson-Boyd, as it may "put the brakes on the shopping".

But she notes that if the chasing of dopamine becomes an obsession, then seeking professional help is best as the consequences can be "serious".

"However, if it is not of a serious nature then training yourself to think pragmatically about the shopping helps.

"For example, if you find that you are keen on 'special offers', then make sure you are equipped with information about whether you are getting a genuine bargain," she says.

She also recommends taking a step back, going for a cup of tea or visiting another shop every time you see something you want to buy.

Dr Jansson-Boyd says: "If you still want to go back to the item, perhaps you really do want it. However, in many cases you will find that you forget about it entirely or that you are not that fussed."

Coming up in this series:

• Tuesday: The five different types of shopping addiction
• Wednesday: 'I was an addict - I ended up in £40,000 of debt'
• Thursday: The techniques big brands use to get us buying more, more, more