The six percent mortgage

From today's Telegraph:

"The average cost of a two-year fixed-rate mortgage has broken through the 5pc barrier for the first time since January and could soon reach 6pc.

Lenders are now charging an average of 5.04pc to home owners who want to fix their repayments for two years, up from 4.92pc on Monday and 4.74pc at the beginning of last week.

The steep rise in the average rate seen in recent days has been driven by Nationwide's decision to increase the cost of some of its fixed-rate deals for the second time in two weeks."

Why are banks pushing up their fixed rates? Could it be that they expect the inflation rate to nudge northwards?