BoE hikes interest rates in fresh blow to mortgage holders – live

John Glenn, Chief Secretary to the Treasury, said: “We are united with the Bank of England in our determination to reduce the inflation rate from 10.7% to the target of 2%”.

He cited the “weaponisation” of energy prices by Vladimir Putin, which caused “enormous challenges” on inflation.

“We recognize that it is really difficult for people in an economy dealing with inflation,” he said.

According to YouGov, a majority of Britons describe the economy as being in poor shape, while eight in 10 (78%) say the government is doing a poor job of managing the cost of living. survey,

Seven in 10 (68%) expect the economy to get worse over the next 12 months.

The picture is even bleaker among conservative voters – a majority (58%) of this group expect the economy to worsen.

This shows that the prime minister and chancellor still have a lot of work to do in convincing the public that they have a grasp on the economy and the rising cost of living.

Liberal Democrats Treasury spokeswoman Sarah Olney said the interest rate hike was “a nightmare before Christmas for families already struggling with the cost of living”.

He said the government’s “complete and utter failure to control inflation and their disastrous mini-budget has pushed up mortgage payments at the worst time of year”.

He called for a temporary ban on home repossessions and a mortgage rescue fund to support the hardest hit.

“The government must also finally deliver on its long-standing promise on no-fault evictions to protect renters at risk of homelessness this winter.”

Think tank The New Economics Foundation condemned the rate hike, saying it was the last thing Britain needed.

Higher rates “will do little to tackle the main causes of inflation (higher prices of imported food and gas), but they will put further pressure on our economy which is already entering recession”, it said.

Unions said the Bank of England’s latest rate hike risks leaving people even further behind in the cost of living.

Kate Bell, head of economics at the TUC, said: “With the UK economy in recession, and the value of everyone’s wages falling, this rate hike could make a bad situation worse.

“The priority now should be to protect living standards and boost the economy to prevent recession and protect people’s jobs,” the union of economists said.

“The best way to do that is to give working people a fair wage increase that keeps up with the cost of living.”

Earlier, a spokesman for the United union said the bank was wrong in approving the rate hike, warning a further rise in borrowing costs “could be the straw that breaks the camel’s back”.

The pound dipped in response to today’s interest rate announcement, falling as much as 1 percent against the dollar.

It bounced back slightly but remained 0.78 percent lower at 1.232 against the US dollar and 0.2 percent lower at 1.160 against the euro.

Market turmoil following Liz Truss’ mini-budget has seen the pound fall sharply this year, plunging almost into parity with the dollar.

It has been rising steadily since September, reaching a six-month peak of 1.24 on Tuesday.

my colleague liam james Here are the full details of today’s bank announcement:

Martin Lewis has said that people on tracker mortgage deals can expect to see their annual costs rise by around £300 a year for every £100,000 of mortgage.

The money savings expert said the current reforms would not change, while “the new fixed rates have already reduced much of this growth.”