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£2,000 council tax bills and mortgage hikes hit families

By Martin Beckford and John-Paul Ford Rojas

STRUGGLING families face a deepening cost of living crisis as mortgage costs rise again along with energy bills, while the average council tax bill tops £2,000 for the first time.

More than one million homeowners on variable rate homeloan deals will see their payments go up by hundreds of pounds a year after interest rates rose yesterday.

The Bank of England increased its base rase by a quarter percentage point to 4.25 per cent – and raised the prospect of more pain to come.

The increase is another blow to hard-pressed homeowners after government figures revealed that the average council tax bill for a Band D property in England will reach a record £2,065 in 2023-24.

The total is up £99 on the figure for the current financial year, a 5.1 per cent rise, yet residents can expect worsening services as council chiefs say they must make massive cuts to balance the books.

At the same time, millions of households are receiving unwelcome letters from energy firms warning that their fuel bills will soon rise by £67 a month as the Government’s discount scheme comes to an end.

Even though the Energy Price Guarantee limiting average bills to £2,500 has been extended to June, the Energy Bill Support Scheme, which automatically gave households £400 off their bills for six months from October, is ending. The economic shocks come a day after figures showing an unexpected rise in the annual inflation rate to 10.4 per cent – a blow to Rishi Sunak’s vow to halve inflation by the end of the year.

Bank of England governor Andrew Bailey said he expected galloping inflation to come down a lot by the summer – but hinted that interest rates could continue to climb until it is brought under control.

‘We know people are worried about the cost of living and they rightly think that inflation is too high,’ he said. ‘Low and stable inflation is the foundation of a healthy economy. Raising rates is the best tool to bring inflation down.

‘We believe inflation will begin to fall quite rapidly before the summer. But we need to see that actually happen. We will go on making the decisions needed to achieve sustained low inflation.’

Chancellor Jeremy Hunt said: ‘With rising prices strangling growth and eroding family budgets, the sooner we grip inflation the better for everyone. That’s why we support the Bank of England’s actions today and why we will continue to play our part in this fight by being responsi

‘Rising prices are strangling growth’

ble with the public finances, alongside providing cost of living support worth an average of £3,300 per household over this year and next.’

But Shadow Chancellor Rachel Reeves said: ‘Too many families are dealing with a Tory mortgage penalty and battling with soaring food prices.’

Businesses will also feel the pain from increased interest rates. And despite 11 interest rate rises in a row, banks have been accused of treating loyal savers as ‘cash cows’ and failing to pass on higher rates to boost their nest eggs.

As the full scale of council tax rises in England became clear, the Prime Minister’s official spokesman said: ‘ We continue to expect [ local authorities] to exercise restraint in setting council tax.’

And the Department for Levelling Up, Housing and Communities said: ‘We’ve given town halls the biggest cash increase in their spending power in ten years, with an extra £3.7billion this year to help them maintain and improve their services and more than £1billion of additional for social care.’ Its figures showed that Londoners will be hit by the biggest percentage rise – 6.2 per cent – in the coming year, taking average bills to £1,789. But total bills will be highest in unitary authorities, reaching an average of £2,139, followed by £2,134 in the shires and £2,059 in metropolitan areas.

The rises came after last year’s Autumn Statement gave councils the power to increase bills by as much as 5 per cent without holding a referendum, higher than the previous limit of 3 per cent.

Despite handing over more money, however, residents may get less back as chiefs in England’s largest councils say will have to make more than £1billion in savings this year as a result of soaring inflation and demand. Bus routes, street lights, recycling centres and community health could all be cut back as town halls try to protect front-line services such as elderly care, they say.

WITH total disregard for families struggling with the cost of living crisis, local authorities are hammering up council tax bills.

For the first time, the average band-D property will pay more than £2,000. Yet despite receiving record sums from the Treasury, town hall chiefs bleat they’ll be forced to cut already deteriorating services – from bin collections to education.

Instead of that, perhaps they should stop squandering thousands on ludicrous vanity projects, green zealotry and straight-tobin newsletters singing their own praises.

NEWS

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