Britons are bracing for more pain today with the Bank of England set to pump up interest rates further in the battle against rampant inflation.
The base rate could go up by 0.75 percentage points to 2.5 per cent – the sharpest increase in three decades – when the decision is announced at midday.
The move will heap misery on mortgage-payers and make borrowing more expensive for the government – just as Chancellor Kwasi Kwarteng prepares to spend hundreds of billions of pounds on energy bills and tax cuts in his mini-Budget tomorrow.
However, the Bank is increasingly desperate to get a hold on inflation, which at 9.9 per cent is nearly five times its target.
The pressure on prices, triggered by the Ukraine war and Russia’s manipulation of gas supplies, has been exacerbated by the plight of the pound against the US dollar – the currency in which many key resources are traded internationally.
Sterling has dropped again overnight to barely 1.12 against the greenback after the US Federal…