Mail Online

Now 1 million households to see mortgage bills rise again

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.

More than one million homeowners will see their mortgage payments go up by hundreds of pounds a year after the Bank of England hiked interest rates to 4.25 per cent – and raised the prospect of more pain to come.

Yesterday’s hike was backed by Chancellor Jeremy Hunt, who said that rising prices were ‘strangling growth’.

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

The economic shocks come a day after figures showing an

‘A source of huge concern’

unexpected rise in inflation to 10.4 per cent – a blow to Rishi Sunak’s vow to halve inflation by the end of the year.

Food prices are going up by an eye-wateringly high 18.2 per cent – a 45-year high – amid salad and vegetable shortages.

Bank of England governor Andrew Bailey said he expected galloping inflation to come down a lot by the time families are heading for their holidays this summer but hinted that 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 it down.’

Mr 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.’

But Labour’s Shadow Chancellor Rachel Reeves said: ‘Today’s interest rate announcement will be a source of huge concern for families across the country. The Government thinks the cost of living crisis is over but the reality is that too many families are dealing with a Tory mortgage penalty.’

Businesses struggling with surging costs and higher taxes will also feel the pain from increased interest rates.

But despite 11 interest rate rises in a row, banks have been accused of treating loyal savers as ‘cash cows’ and failing to pass on the higher rates to help boost their nest eggs.

State support for the cost of living crisis is also reducing, even though the Energy Price Guarantee limiting average bills to £2,500 has been extended to June.

The separate Energy Bill Support Scheme, which gave households £400 off their bills for six months from October, is ending and some providers have started to warn customers their bills will be higher from April.

News

en-gb

2023-03-24T07:00:00.0000000Z

2023-03-24T07:00:00.0000000Z

https://mailonline.pressreader.com/article/281505050466592

dmg media (UK)