LONDON, July 11 Reuters A key British mortgage rate hit a 15year high on Tuesday when it rose above the levels reached in the aftermath of September39;s minibudget crisis, adding to strains on the country39;s slowing housing market as the Bank of England battles stubborn inflation.

The average twoyear fixed residential mortgage rate climbed to 6.66, narrowly exceeding the 6.65 touched on Oct. 20 and the highest since August 2008 when it stood at 6.94, according to data provider Moneyfacts.

Britain39;s housing market activity staged a recovery in early 2023 from the turmoil triggered by the unfunded taxcutting plans of former Prime Minister Liz Truss. But homeowners and buyers have faced renewed mortgage pain in recent months.

Fixed mortgage deal rates have risen rapidly in recent weeks as stickierthanexpected consumer price inflation, which held at 8.7 in May, pushed up bond yields and increased market bets on the BoE39;s benchmark rate peaking at 6.5, up from 5 now.

Governor Andrew Bailey said last month there were signs of more persistent underlying inflation pressures after the BoE unexpectedly raised its Bank Rate to 5 in an effort to tame the highest inflation rate among the world39;s big rich economies.

Swap rates, a key measure lenders use to determine the cost of mortgage borrowing, have also soared. Twoyear swaps jumped by 0.89 percentage points over the course of June.

The surge has prompted major mortgage lenders to repeatedly reprice home loan offerings….