Money blog: Major bank cuts mortgage rate below 4% (2024)

Wall Street's "fear gauge" (proper name: the Chicago Board Options Exchange Volatility Index) has dropped by about 20% today - indicating markets are starting to feel more stable.

VIX surged by as much as 181% on Monday but on Tuesday it recorded a drop of 28% as stock markets rallied around the world.

Global shares have risen after a Bank of Japan official suggested the central bank would refrain from raising interest rates amid an unstable time in the market.

VIX is Wall Street's most-watched gauge of investor anxiety.

Airbnb shares slumped nearly 15% today, with the company citing slowing demand in the US and shorter booking windows among the reasons.

The San Francisco-based company reported a 14.9% drop in profit for the second quarter compared with last year, despite an increase in bookings and revenue.

The company has warned it is experiencing a shorter booking lead time globally which refers to the number of days between the reservation date and actual arrival.

A shorter booking window can indicate travellers are booking travel at the last minute due to increased uncertainty and caution in spending.

There have also been signs that domestic travel in the US has slowed since the start of the year.

Airbnb chief financial officer Elinor Mertz said yesterdaythat softness in long booking lead times was a big factor in its forecast.

By Sarah Taaffe-Maguire, business reporter

The stock market panic of Monday may soon be in the rearview mirror as the worst-hit companies rebounded on Wednesday morning trading in the US.

The tech companies that suffered the most from the recent sell-off returned to the high values before fears over the US economy triggered the sales.

AI microchip maker Nvidia climbed 3.8% while Instagram and WhatsApp owner Meta and Amazon held on to most gains of the morning trades.

These highly valuable companies - worth more than $1trn - are part of the indexes that observers use to assess the health of the stock market.

While other tech giants like Apple and Google owner Alphabet saw a rise in their share price today, the numbers still aren't at the pre-Monday sell-off level yet.

As a result of these firms' share price growth, the tech-heavy NASDAQ was up more than 1%, as was the S&P 500 (containing companies relied on to be stable and profitable).

Up 0.75% was the Dow Jones Industrial Average (DJIA) index of 30 major companies listed on US stock exchanges.

In the UK the benchmark index - the FTSE (Financial Times Stock Exchange) 100 - rose 1.75% on the close. The larger FTSE 250 with more UK-based constituent companies ended the day up 1.02%.

Barclays is making cuts to a selection of products across its residential purchase, remortgage and reward ranges from tomorrow.

The most notable rate change will be the bank's five-year fixed rate for home buyers with a 60% loan to value (LTV) ratio and a £899 product fee, which has been reduced to 3.84%.

The previous rate on the product was 4.04%.

Meanwhile, its 4.61% two-year fixed rate, will decrease to 4.43%.

The Bank of England base rate was cut last week from 5.25% to 5%, but lenders had already been slashing rates in the weeks leading up to the move.

Stephen Perkins, managing directorat Yellow Brick Mortgages, told Newspage that more lenders going sub 4% was "greatly welcomed".

"Barclays have made a real statement of intent here. It's game on in the mortgage market now," he said.

Meanwhile, Riz Malik, directorat R3 Mortgages, told the news outlet that the "post-base rate cut bonanza from Barclays will help drive confidence among borrowers and in the UK housing market".

The start of the week was rocked by turbulence on the global markets over fears that the US was heading for recession - but they have now rebounded slightly.

Trillions were wiped off US markets after figures showed fewer American jobs were created last month than Wall Street had predicted, combined with concerns the Federal Reserve had kept interest rates high for too long.

Now the US looks likely to avoid recession, according to bond giant PIMCO, which manages $1.9trn in assets.

Daniel Ivascyn, group chief investment officer, said the US was still on track for a soft landing - shifting to lower growth or flatlining without entering a recession - despite the probability of a recession increasing on Monday.

"We do think the market has probably gotten a little bit ahead of itself in terms of pricing in central bank cuts," Mr Ivascyn said.

"Barring some major geopolitical shock or some major issue with market functioning, central banks, the Fed in particular, will likely cut by 25 basis points in September and future meetings will be live."

The US fiscal picture is "dire" at the moment, but it remains manageable, Mr Ivascyn said.

Halifax predicts house prices will increase for the rest of the year.

Lower mortgage rates and potential base rate reductions will push up asking prices, said the bank's head of mortgages, Amanda Bryden.

The average price rose by £2,200 from June to July, Halifax found, following three relatively flat months and putting the average house at £291,268.

"Last week's Bank of England base rate cut, which follows recent reductions in mortgage rates, is encouraging for those looking to remortgage, purchase a first home or move along the housing ladder," said Ms Bryden.

Rates were lowered from 5.25% to 5% on Thursday - the first cut in more than four years.

"Against the backdrop of lower mortgage rates and potential further base rate reductions, we anticipate house prices to continue a modest upward trend throughout the remainder of this year," Ms Bryden said.

Holly Tomlinson, a financial planner at wealth manager Quilter, said she expected the autumn to be a busier period for the market, as indecisive sellers are encouraged by the direction in which rates are going.

Purplebricks chief executive Sam Mitchell agreed: "With lenders already slashing mortgage rates in response to last week’s decision, buyers are beginning to move ahead with purchasing decisions they have been putting off for months."

A supermarket cafe is giving away free crumpets - if you know the password.

Ask for "Ellen" at a Morrisons Cafe and you can get a free portion of Warburtons crumpets with a choice of six toppings.

The offer, named after Warburton's founder, Ellen Warburton, is available until 25 August or while stock lasts.

How to get your free crumpets

Just ask for "Ellen" at the till, and you'll receive two crumpets with either honey, banana, chocolate spread, jam and butter, marmalade, or maple-flavoured syrup.

Vegan spread is available on request, according to Warburtons, which has teamed up with Morrisons over the summer holidays.

There is no minimum spend and the freebie is available in all cafes - but customers can only get one portion per person each day.

Morrisons told Money Saving Expert that there are 100,000 portions available - which cost 99p before they were removed from its cafe menus.

A major bank has created a series of deepfake videos to warn customers how realistic they have become.

Santander has posted the videos, featuring its fraud lead Chris Ainsley and influencer Timi Merriman-Johnson, on social media to raise awareness of a method of fraud increasingly available to criminals.

Deepfakes can be videos, sounds or images of real people that have been digitally manipulated through artificial intelligence to convincingly misrepresent a person or organisation.

"Generative AI is developing at breakneck speed, and we know it's 'when' rather than 'if' we start to see an influx of scams with deepfakes lurking behind them," said Mr Ainsley.

"We already know fraudsters flood social media with fake investment opportunities and bogus love interests, and unfortunately, it's highly likely that deepfakes will begin to be used to create even more convincing scams of these types."

Just 17% of people are confident they could easily identify a deepfake video, found an Opinium survey of 2,000 people for Santander in July.

Almost Six in 10 people said they are already more suspicious of what they see or hear because of deepfakes.

Here are Santander's top tips to spot a deepfake:

1. Deepfakes are likely to be used in investment scams and impersonation fraud, such as romance scams.
2. Look out for imperfections like blurring around the mouth, less blinking than normal, or odd reflections.
3. Context is important. Ask: Is this too good to be true? If this is real, why is everyone not doing this? If this is legitimate, why are they asking me to lie to my family or my bank?

By Daniel Binns, business reporter

The stock market in London is continuing to slowly recover this morning following Monday's global falls.

The FTSE 100 is up 0.9%, while the FTSE 250 has gained 0.7%.

Banks and financial institutions are among the top gainers, including NatWest, which is up 2.5%,Standard Chartered, which has risen 2.9%, and Lloyds Banking Group, which has increased by 2%.

Fallers include bottling company Coca-Cola HBC - which is a partner of the global drinks firm - down 2.4%.

It comes despite the company upgrading its profit and revenue forecast for the year.

Hotel giant IHG, which owns brands including Holiday Inn, is also down 1.8% despite positive second quarter results published yesterday.

Oil prices are also gradually creeping back up following falls last week.

A barrel of the benchmark Brent crude will currently set you back just over $76.5 (£60), a rise of 0.3%.

On the currency markets, £1 buys $1.27 US or €1.16 this morning.

Read more on what caused Monday's US recession fears here...

Many families rely on grandparents for childcare, and most are happy to oblige.

Their reward is often simply spending valuable time with their grandkids and making memories - but what if they actually got paid?

A new tool by SunLife, a financial services company used by people later in life, allows grandparents to input all the hours of "parenting" they do - from taxiing to cooking to days spent babysitting.

We had a go - answering each question in what we presumed could be a typical scenario. Our fictional grandparent did two hours each of taxiing, cooking and cleaning for their grandkids, and 18 hours (roughly two working days) of babysitting a week.

For this, SunLife estimates a salary of £15,864 would be appropriate.

SunLife recently polled more than 2,000 grandparents and found there has been a rise in the number being relied upon to look after grandchildren during the school holidays and on inset days.

More than four in 10 (43%) now provide "holiday" care and are giving up 18 hours a week on average - up from 16.54 hours last year and equivalent to almost three days a week.