Mortgages: Average two-year fixed-rate mortgage deal £35 a month more

An average two-year fixed-rate mortgage deal is £35 a month more expensive than a few weeks ago, new figures show.

The interest charge has gone up by 0.3% since recent data showing inflation not coming down as quickly as expected, financial data firm Moneyfacts said.

The surprise led many to predict the Bank of England will raise rates higher than previously thought, from their current 4.5% to as high as 5.5%.

It has prompted many lenders to raise mortgage rates and also remove deals.

Hundreds of mortgage deals have now been pulled from the market as lenders reassess their offers.

The Bank of England has been steadily raising interest rates for the last year and a half, as it tries to tackle soaring prices.

According to Moneyfacts, the average two-year fixed rate on a £200,000 mortgage over a 25-year term is now 5.64%.

That compares with 5.34% before the latest inflation data.

Inflation shows the rate at which prices are rising. The rate has shot up over the past 18 months, as food and energy prices have soared, leaving many household feeling squeezed.

Last month's data showed the rate of inflation fell to 8.7% in the year to April - down from 10.1% in March but above the 8.2% figure expected.