Halifax raises mortgage rates

Halifax, which accounts for one in every five mortgages in the UK, is increasing the rate charged on 20 of its tracker mortgages for new customers by between 0.1% and 0.2% from Friday.

The move comes the day after Britain's second biggest lender Abbey announced it is increasing its tracker mortgage rates by the same amount for new customers.

Paul Fincham, of Halifax, said: "It is a combination of things. Pricing has changed in the markets. Also we have seen other lenders move so we needed to adjust our rates."

Standard Life is also due to increase its rates next week, although it has not yet said by how much, while specialist lender Capital Home Loans is also raising its.

Commentators warned that now the UK's two biggest lenders had hiked their rates, other banks and building societies were likely to quickly follow suit.

Ray Boulger, senior technical manager at John Charcol, said there was likely to by an "acceleration" in the trend.

He said: "This gives some comfort to other lenders who are thinking of moving and didn't want to be first.

"The longer that lenders think this (volatility) will go on for, the more reason there is for them to put their tracker rates up."

He also warned that some lenders may also increase their standard variable rates, which would affect existing customers who were on discount mortgages.