As the nation enters the first day of the second national lockdown, the Bank of England (BoE) warned the restrictions imposed to contain the spread of Covid-19 will have a detrimental impact on the economy, predicting it will shrink in this quarter.

It has attempted to defend the economy with a £150 billion quantitative easing (QE) injection.

This and the Monetary Policy Committee’s (MPC’s) decision to maintain the base rate at the historic low have received a positive reaction.

Indeed, David Ross, managing director of Hometrack, said described it as ‘encouraging’.

He added: “This, combined with the Stamp Duty holiday, will ensure demand for mortgages remains high however, with fewer products now available, it’s increasingly clear many potential home movers will miss out.”

Meanwhile, Simon Gammon, managing partner of Knight Frank Finance thinks mortgage costs will continue on an upward trajectory.

He said: “The Bank of England would clearly like to hold borrowing costs lower for longer in an attempt to spur economic growth, but the cost of mortgages is likely to keep rising while lenders are being swamped with new applications.

“There were more mortgages approved for house purchase last month than any time since October 2007 and the surge in property market activity is showing few signs of slowing.

“As a result we’re seeing a huge variety in borrowing costs from lenders, depending on their volume of work and appetite to lend.”

Alex Maddox, capital markets and digital director of Kensington Mortgages said: “The announcement of £150 bn of QE will be well received, as the latest lockdown is going to put yet more pressure on the economy.

“Now the Bank of England needs to work on how to get this support through to mortgage customers, since mortgage rates from the high street have been increasing recently.”