Reeves’s plan to cut cash Isa limit could raise mortgage rates, say finance bosses

Cash Isas are a key source of funding for banks and building societies. Photograph: Hiba Kola/Reuters

Rachel Reeves’s plan to slash the annual cash Isa limit by 40% could lead to higher mortgage rates and deter consumers from saving, finance bosses have said.

The chancellor is expected to cut the maximum amount people can put into tax-efficient cash individual savings accounts from £20,000 a year to £12,000 in Wednesday’s budget.