Mortgage lenders are increasing some of their fixed rates or pulling products with a view to refreshing rates.

The changes have come following this week’s higher than expected inflation figures, which make it more likely the Bank of England will respond with another rate rise next month.

Nationwide is the largest lender to have announced an increase, of up to 0.45 percentage points on some of its mortgage products.

Virgin Money has also increased some rates by up to 0.12 percentage points while a handful of smaller and specialist lenders announced hikes or product range withdrawals.

Luke Hickmore, investment director at abrdn, explained: “Interest rate markets are now pricing in 5.25% peak at the end of December 2023, with a significant probability of 5.5% in early 2024. We will see mortgage fixing rates adjust to this new dynamic, in the short term at least.

“If the rate rises in June, that will be the 13th straight rise in interest rates from the Bank and the mortgager providers will adjust to reflect the extra cost of funding those mortgages, passing it on to consumers.”

Rightmove’s mortgage expert Matt Smith, added: “It’s early days, but we’ve seen the first major lender significantly increase rates and it’s likely that we’ll see other lenders follow suit, though the full impact may take a few weeks to filter through.

“An increase in fixed-rates was likely to happen following the news earlier in the week that inflation had not fallen as much as markets had predicted. Subsequently the underlying costs of mortgages to lenders has increased and it appears they’re now starting to pass this on through their fixed-deals.

“We’ve seen average rates creep up from where they were earlier in the week and we expect some further increases in the coming weeks. Though the upward trajectory of mortgage rates will understandably be concerning to those thinking of moving soon, it’s important to remember that right now rates are still lower than they were on average in February before edging down in March & April, and there are likely to be more twists and turns to come with the ongoing uncertainty over inflation.”