Labour’s pledge to invest £28 billion each year in combating climate change could have a significant impact on millions of homeowners, since interest rates might skyrocket, causing mortgage prices to rise.
Labour has been chastised for committing to invest £28 billion a year in climate change mitigation, with critics warning that the party’s policies will inflict financial hardship for millions of Britons.
According to ministers, Labour’s pledge to spend money on environmental issues will raise mortgage rates while also increasing the country’s reliance on foreign oil and gas.
The Treasury has reportedly calculated that householders may have to pay up to £1,000 more per year due to an increase in interest rates, which is expected to be 0.75%, which has a knock-on effect for mortgages.
In addition, Britain would have to pay more for imports since Labour intends to block new investment in North Sea oil and gas (by prohibiting new extraction licences), as the much-maligned protest group Just Stop Oil has demanded.
According to the Treasury, “significantly higher interest rates could cause financial and market stability risks, leading to a recession.”
Labour first proposed the changes in 2021, before the cost-of-living crisis erupted, and senior party officials have suggested that their ideas may now have to be scaled back.