Two of the UK's biggest sub-prime mortgage lenders have been forced to raise interest rates.

Merrill Lynch subsidiary Mortgages plc said it would raise rates by more than 1% on some products, while Edeus, which is also backed by Merrill Lynch, said its rates will rise from next week.

Last week, DB Mortgages, Infinity Mortgages and Unity Homeloans, which all launched sub-prime mortgages for the first time last year, exited the market.