The Bank of England is poised to raise interest rates for the 13th time in a row after inflation remained unchanged last month, piling further pressure on households.
The UK’s Consumer Prices Index (CPI) was unchanged in May at a rate of 8.7%, according to the Office for National Statistics.
Economists agree that the Bank’s Monetary Policy Committee (MPC) is likely to raise interest rates on Thursday, from the current rate of 4.5%, and that more hikes are on the horizon.
It comes as concerns have mounted over the mortgage market, with the average two-year fixed residential mortgage rate surpassing 6%, according to data from Moneyfactscompare.co.uk.
Moreover, expectations of where rates will peak have surged in recent weeks, with markets now anticipating a high of 6% by early next year. It would mean rates hit the highest level in more than two decades.
Chancellor Jeremy Hunt said he has spoken to consumer champion Martin Lewis, who on Tuesday said that a mortgage ticking time bomb is now “exploding” ahead of meeting with Britain’s major lenders on Friday.
