Britain’s biggest banks have pressed the chancellor over a potential extension of the government’s mortgage guarantee programme amid surging interest rates.
During a meeting with Chancellor Kwasi Kwarteng on Thursday, senior executives at high street lenders and building societies discussed how they could better protect mortgage-holders and the most vulnerable customers.
The banks asked Mr Kwarteng to consider extending the mortgage guarantee programme, which protects lenders against losses when lending to first-time buyers, the PA news agency reported.
The programme is designed to help creditworthy households who are struggling to save for higher mortgage deposits get on the housing ladder by compensating lenders for a portion of any losses on defaults.
Several high street banks have been part of the programme, but it is due to come to an end in December.
Britain’s biggest building society, Nationwide, had never joined the government programme and launched its own support measures for first-time buyers with smaller deposits.
Bank chiefs also spoke to the chancellor about how mortgage-holders can be better protected at a time when interest rates are rising.
How to prepare for a recession — video
PA reported that Consumer Duty rules of the Financial Conduct Authority (FCA) were raised in the meeting, which require firms to end rip-off charges and fees and give customers information that is easier to understand and support when it is needed.
The financial watchdog had announced the plans in July and given financial services companies 12 months to enact new rules that are designed to better protect vulnerable customers.
However, banks have been battling against market volatility and swap rates — which mortgage pricing is based on — increasing at unprecedented levels in response to the current economic conditions.
The rate on a typical five-year fixed mortgage surged past 6 per cent for the first time in 12 years on Thursday.
And on Wednesday, the two-year fixed-rate mortgage also breached 6 per cent for the first time in 14 years.
HSBC, Santander and Virgin Money are among the lending companies that have withdrawn products from the market for new borrowers since the government unveiled its mini-budget that prompted turmoil in the financial markets.
Bank of England raises interest rates by biggest margin in 27 years — video
The topic of MREL was also reportedly raised — referring to the minimum requirement for own funds and eligible liabilities, a post-2008 financial crisis measure that was brought in to protect customers against the collapse of smaller banks.
Some experts have debated the possibility that the MREL requirements stifle growth, particularly among challenger banks, and need to be reformed.
It comes amid growing concerns that lenders could be hit by a wave of homeowners defaulting on their mortgages, leaving them with bigger debts on their balance sheets.
Prime Minister Liz Truss repeated her claim that global factors are ultimately to blame for rising interest rates.
Speaking to broadcasters at the European Political Community in Prague, Ms Truss was asked about rising mortgage rates, a credit-rating agency downgrading the UK and the Bank of England’s description of the chancellor’s role in contributing to recent market issues.
“We’re facing a very, very difficult economic situation. We have rising energy prices and we have rising interest rates around the world. The [US] Federal Reserve has raised its interest rates to 4 per cent,” said Ms Truss.
“What we’re doing as a government is first of all making sure that people aren’t facing gargantuan energy bills this winter. People were facing bills of up to £6,000 [$6,700].
“We’re now making sure that the typical household doesn’t pay more than £2,500. We’re also reducing people’s taxes, helping grow the economy, but of course, these are difficult times.
“And that’s why it’s important I’m here in Prague making sure we’re working with our international partners to deal with these very real issues which ultimately have been caused by [Russian President Vladimir] Putin’s war in Ukraine.”
The biog
Place of birth: Kalba
Family: Mother of eight children and has 10 grandchildren
Favourite traditional dish: Al Harees, a slow cooked porridge-like dish made from boiled cracked or coarsely ground wheat mixed with meat or chicken
Favourite book: My early life by Sheikh Dr Sultan bin Muhammad Al Qasimi, the Ruler of Sharjah
Favourite quote: By Sheikh Zayed, the UAE's Founding Father, “Those who have no past will have no present or future.”
The specs: 2019 Cadillac XT4
Price, base: Dh145,000
Engine: 2.0-litre turbocharged in-line four-cylinder engine
Transmission: Nine-speed automatic
Power: 237hp @ 5,000rpm
Torque: 350Nm @ 1,500rpm
Fuel economy, combined: 8.7L / 100km
Racecard
6.30pm: Mazrat Al Ruwayah Group Two (PA) US$55,000 (Dirt) 1,600m
7.05pm: Meydan Trophy (TB) $100,000 (Turf) 1,900m
7.40pm: Handicap (TB) $135,000 (D) 1,200m
8.15pm: Balanchine Group Two (TB) $250,000 (T) 1,800m
8.50pm: Handicap (TB) $135,000 (T) 1,000m
9.25pm: Firebreak Stakes Group Three (TB) $200,000 (D) 1,600m
10pm: Handicap (TB) $175,000 (T) 2,410m
The National selections: 6.30pm: RM Lam Tara, 7.05pm: Al Mukhtar Star, 7.40pm: Bochart, 8.15pm: Magic Lily, 8.50pm: Roulston Scar, 9.25pm: Quip, 10pm: Jalmoud
Tips for job-seekers
- Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
- Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.
David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
The cost of Covid testing around the world
Egypt
Dh514 for citizens; Dh865 for tourists
Information can be found through VFS Global.
Jordan
Dh212
Centres include the Speciality Hospital, which now offers drive-through testing.
Cambodia
Dh478
Travel tests are managed by the Ministry of Health and National Institute of Public Health.
Zanzibar
AED 295
Zanzibar Public Health Emergency Operations Centre, located within the Lumumba Secondary School compound.
Abu Dhabi
Dh85
Abu Dhabi’s Seha has test centres throughout the UAE.
UK
From Dh400
Heathrow Airport now offers drive through and clinic-based testing, starting from Dh400 and up to Dh500 for the PCR test.
The essentials
What: Emirates Airline Festival of Literature
When: Friday until March 9
Where: All main sessions are held in the InterContinental Dubai Festival City
Price: Sessions range from free entry to Dh125 tickets, with the exception of special events.
Hot Tip: If waiting for your book to be signed looks like it will be timeconsuming, ask the festival’s bookstore if they have pre-signed copies of the book you’re looking for. They should have a bunch from some of the festival’s biggest guest authors.
Information: www.emirateslitfest.com
Another way to earn air miles
In addition to the Emirates and Etihad programmes, there is the Air Miles Middle East card, which offers members the ability to choose any airline, has no black-out dates and no restrictions on seat availability. Air Miles is linked up to HSBC credit cards and can also be earned through retail partners such as Spinneys, Sharaf DG and The Toy Store.
An Emirates Dubai-London round-trip ticket costs 180,000 miles on the Air Miles website. But customers earn these ‘miles’ at a much faster rate than airline miles. Adidas offers two air miles per Dh1 spent. Air Miles has partnerships with websites as well, so booking.com and agoda.com offer three miles per Dh1 spent.
“If you use your HSBC credit card when shopping at our partners, you are able to earn Air Miles twice which will mean you can get that flight reward faster and for less spend,” says Paul Lacey, the managing director for Europe, Middle East and India for Aimia, which owns and operates Air Miles Middle East.
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Timeline
2012-2015
The company offers payments/bribes to win key contracts in the Middle East
May 2017
The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts
September 2021
Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act
October 2021
Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence
December 2024
Petrofac enters into comprehensive restructuring to strengthen the financial position of the group
May 2025
The High Court of England and Wales approves the company’s restructuring plan
July 2025
The Court of Appeal issues a judgment challenging parts of the restructuring plan
August 2025
Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision
October 2025
Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange
November 2025
180 Petrofac employees laid off in the UAE
A Prayer Before Dawn
Director: Jean-Stephane Sauvaire
Starring: Joe Cole, Somluck Kamsing, Panya Yimmumphai
Three stars
