KWASI Kwarteng flew back from Washington DC last week to be given his jotters as chancellor. 

His mini-budget was a fantastical nonsense from the twilight zone. 

Borrow billions to give to the rich and make life more costly for those struggling to make ends meet in a cost-of-living crisis. 

It was an uncosted back of a fag packet plan that spooked the financial markets around the world.

Mr Kwarteng had plenty of hubris but little else as he tanked the economy and sterling. 

His destiny was to become a fall guy for a hapless Prime Minister who hasn’t quite run out of steam because she never had any in the first place. 

Let’s not forget Liz Truss sat and beamed with approval as Kwasi Kwarteng announced his kamikaze budget a few weeks ago. It was her budget too. 

Now we have the reprising role of failed health secretary Jeremy Hunt as chancellor. 

It’s like the final instalment in the Scary Movie franchise. 

The UK looks ridiculous on the world stage. The reason Kwarteng was in the United States with the governor of the Bank of England (BoE) was to meet the International Money Fund (IMF). 

The IMF cautioned against tax giveaways and warned that inflation needs to get under control. 

Which brings us back to Andrew Bailey, the governor of the BoE. He told an audience in Washington that the bank would “not hesitate to raise interest rates”. 

All eyes are now on the next BoE’s next base rate rise in just two weeks’ time. We had a half a per cent rise in September to 2.25%. Analysts are now predicting a rise on November 3 by 0.75 to 1%. 

Let me explain how these cumulative rises are going to push many people over a financial cliff 
edge. 

A 1% base rate rise will add at least £46 per month for every £100,000 on a standard variable rate (SVR) or tracker mortgage.

From February 2009 to August 2016 the base rate had flatlined at 0.5%, before being lowered to 0.25%. From the onset of the Covid-19 pandemic, the base was lowered to 0.1% and remained so until December last year – since then we have had seven increases taking us to 2.25%; and possibly 3% or 3.25% in a couple of weeks.

There are 11 million household mortgages in the UK. Roughly 7.18m are fixed rate, but we know as many as two million households are coming to the end of their cheap deals. 

The mortgage broker Habito estimates 27% of mortgage holders are on their lender’s SVR – that could be almost three million households in the UK. 

UK Finance estimates there are 850,000 people with tracker rate mortgages.

I calculate that more than half of Scottish households with mortgages may be adversely affected by further base rate hikes; some 465,600 households including those coming off fixed rate deals, SVRs and tracker rates.

There may be 150,000 buy-to-let mortgage holders in Scotland impacted by base rate rises. 

Many people may be able to absorb another 1% on their mortgage, but there will be a significant number who are already overleveraged with personal debts because of the pandemic and energy bill crisis. They won’t be able to afford further mortgage hikes.

Even if we assume only 5% of those affected by base rate rises are pushed over the edge financially that still gives us more than 20,000 households. 

They can obtain free money advice at sites like debtnavigator.scot and look at debt solutions but if their mortgage is ultimately unaffordable then we are looking at a surge in mortgage repossessions over the coming year.

We can defend those court actions but only if we have a solution which means the monthly mortgage and arrears can be paid within a reasonable period of time (and certainly within the remaining term of the loan). 

For unaffordable scenarios the option may be to sell and downsize if there is good equity in the property. 

For many people the only way to prevent homelessness may be to use the Scottish Government’s Home Owner Support Fund (HOSF).

The HOSF enables a homeowner to apply the mortgage to a shared equity scheme whereby the Scottish Government can take stake in your property up to 30% – so your mortgage is less. 

Or the mortgage to a rent scheme where a social landlord buys your home and you can remain there as a Scottish secure tenant.

The difficulty with the HOSF is that it’s been somewhat moribund since Covid-19. 

Is it going to be able to cope with the demand if there is a surge in mortgage repossessions across Scotland?