UK GDP: mortgage payers’ worst fears are likely to come true

Further interest rate rises are now likely in August, dampening an already gloomy housing market. Photograph: Gary Calton/The Observer

For mortgage payers, the latest economic growth figures are a disappointment.

The 0.1% contraction in gross domestic product between April and May tells the Bank of England that the jump in interest rates over the previous 18 months has only had a mild dampening effect on the economy.