Mortgage costs have surged to an average of 5.5% for two-year fixed deals, even after the Bank of England lowered the base interest rate to 4.75%. Major lenders like Barclays and HSBC have increased their rates, frustrating borrowers anticipating lower costs. This rise is attributed to the financial market’s adjusted expectations following recent government spending pledges, which could lead to inflation. Although rates are lower than their August peak of 6.85%, borrowers face a continued upward trend amid uncertainty over future rate cuts.