Summary
Here’s a summary of today’s events:
During PMQs, Angela Rayner pointed out the last time the deputies stood in at PMQs two weeks running was in 1996. She says she’s proud to be in the same place John Prescott once stood, before pointing at Oliver Dowden, standing in for Sunak: “He’s no Heseltine.” Inspired by John Prescott’s question back in 1996, she pointed out that “tens of 1000s of families are facing repossession and homelessness” due to the “Tory mortgage bombshell”.
The UK prime minister, Rishi Sunak, gave a standalone press conference in Vilnius. From a UK perspective Sunak said “we are the leading European contributor to Nato” and said that British people should know how appreciated that is within the alliance, as one of the only nations that contributes to every Nato mission.
The prime minister has shut down comments by the defence secretary after Ben Wallace suggested Ukraine should show “gratitude” for the military support it has been given. Rishi Sunak said the Ukrainian president Volodymyr Zelenskiy had “repeatedly expressed gratitude” for what the UK had done for Kyiv since Russia’s invasion broke out more than 500 days ago.
Nadine Dorries has been reported to the chief whip and Commons speaker after allegedly sending “forceful” emails to the government about not being given a peerage. In a highly unusual move, the cabinet secretary, Simon Case, revealed he had “flagged” the issue to the parliamentary authorities, and also asked for advice about any potential breach of the law.
Michael Gove’s department is handing back £1.9bn to the Treasury originally meant to tackle England’s housing crisis after struggling to find projects to spend it on. The Department for Levelling Up, Housing and Communities (DLUHC) has surrendered hundreds of millions of pounds budgeted for 2022-23, including £255m meant to fund new affordable housing and £245m meant to improve building safety.
Jeremy Hunt has told ministers there will be no extra money to give millions of public sector workers an average 6% pay rise, potentially leaving departments facing a difficult choice between raising salaries or cutting frontline services.
Rishi Sunak is set to host all Tory MPs for morale-boosting hog roast at Downing Street tonight. He’s due to fly back to the UK from the Nato summit this evening in time to welcome his guests and try to instil some positivity over his party’s struggle to recover in the polls and the prospect of them potentially losing in all three by-elections taking place next week on 20 July.
The Civil service chief, Simon Case, said the last five years had seen a deterioration in relations between officials and politicians, although he added the situation had improved since Rishi Sunak became prime minister.
That’s it for me for today. Thanks so much for joining me.
Updated
Almost 1 million UK homeowners will be forced to shell out at least £500 more a month to cover mortgage payments by the end of 2026, as borrowers suffer the consequences of rising interest rates, the Bank of England has warned.
Forecasts released on Wednesday showed that of the 4 million homeowners expected to roll on to new mortgage contracts over the next three years, the majority will be paying up to £220 more a month to cover the mortgage by the end of this year because of the difficulty of finding contracts with comparable rates.
The payments of more than 1 million borrowers are likely to rise by more than twice that amount by the end of 2026.
Markets are increasingly betting that policymakers at the Bank raise interest rates beyond the current level of 5% to a peak of 6.25% in early 2024 in order to combat stubbornly high inflation.
The average two-year fixed mortgage rate rose to 6.7% on Wednesday – the highest level since the middle of the financial crisis in August 2008, according to data from Moneyfacts.
However, the Bank governor, Andrew Bailey, said higher payments were part of the wider economic trade-off of trying to tame price growth.
He said:
It is going to have an impact, clearly.
That is part of the transmission of monetary policy, no question about that.
And I’m going to come back to the point we’ve made a number of times … we are trying to balance having the transmission function of monetary policy with two things … one is the resilience of the banking system, and two, its ability to support customers and manage the consequences of this.
But there still will be consequences of increased interest rates.
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Updated
