Santander's Abbey First to Raise U.K. Mortgages

Abbey, the U.K. arm of Spanish banking giant Banco Santander , is the first high street bank to raise its mortgage rates in the wake of the turmoil in the financial markets.

The lender said it is increasing its tracker mortgages for new customers by between 0.1-0.2%, and blamed the rise in short-term borrowing costs for the move. Fixed rate mortgages are unchanged though.

Analysts said it is unsurprising that Abbey was one of the first to lift its mortgage rates, because it is owned by one of the major European banks, which are thought to have suffered more in the fallout from the US subprime crisis than their counterparts in the U.K.