The Bank of England is expected to increase interest rates by up to 0.5 per cent today in an attempt to rein in runaway inflation.
Millions of Britons’ finances could take another hit if the bank announces its biggest hike in interest rates since 1995.
Nine members of the Monetary Policy Committee will be voting on whether to increase the bank’s base rate by 0.25 per cent or 0.5 per cent. Either way, mortgage borrowing would be made more expensive.
It comes as economists fear a recession caused by “stagflation” – sluggish growth, high unemployment, and inflation.
The Resolution Foundation think tank has warned that next year inflation could reach an “astronomical” record-high of 15 per cent – the highest level since 1980.
This will see prices for essentials increase much faster than wages, while the UK faces a winter of yet more record highs in gas and electricity prices fuelled by Russia’s invasion of Ukraine.
Low to middle-income families are likely to face disproportionately higher living cost levels for the foreseeable future, the think tank said.
