The UK's deepening mortgage crunch

The huge shift in the UK mortgage market towards fixed rate mortgages has slowed the transmission of monetary policy to existing mortgages and only around one-third of the impact of tighter monetary policy has so far been felt by the economy. However, the large stock of mortgages due to be refinanced in the coming months will mean a big increase in economy-wide mortgage servicing costs and will tip the economy into recession by Q4 this year, says abrdn.