Britain’s big squeeze has got even worse today after the Bank of England raised interest rates by 0.5% – the highest single rise since 1997 – adding £1,000-a-year or more to the average mortgage.
Officials on the monetary policy committee (MPC) raised the base rate from 1.25 per cent to 1.75 per cent as experts warned inflation could be heading for 15 per cent.
The Bank of England insists today’s rise is necessary to try to bring down inflation by next year – but it comes as Britons face the worse squeeze on household budgets for a generation.
Food, fuel, gas and numerous other items are rocketing in price – and some economists have claimed the BofE have been too slow to act as Britain heads towards recession.
Today’s rise is the largest since the Bank gained independence from the Treasury in 27 years, and the first 0.5 percentage point hike since 1995. The MPC of nine members voted eight to one in favour of a rise to 1.75%.
The rate increase will hit around 20 per cent of…