Banks turn the screw with a weekend of worse mortgage rates

More than 100,000 households face a squeeze on their finances this month as lenders increase rates amid escalating turbulence in Britain's mortgage market.

In a rare move, the country's third-largest lender, Santander, made changes over the weekend and TSB withdrew all its ten-year fixed-rate deals on Friday with just two and a half hours’ notice. Coventry Building Society will increase all its two, three and five-year deals tomorrow.

The action is being driven by worse-than-expected inflation figures last month, which fell to 8.7 per cent despite hopes they would drop further. The difficulties in the mortgage market will heighten fears in government that cost of living pressures are not reducing for enough Britons, even as inflation falls.

The number of mortgage deals has hit its