Mortgage warning as Bank of England interest rates rise

The increase has been described as a “hammer blow for working people” by shadow chancellor Rachel Reeves.

The Bank of England raised the base rate for the 14th time in a row on Thursday, taking it to 5.25% in a bid to bring inflation under control.

The Bank said it expects the Government to meet its promise to halve inflation by the end of the year.

Shadow chancellor Rachel Reeves (Image: James Manning/PA Wire)

Writing in the Daily Mirror, the shadow chancellor said the Government is “managing decline rather than getting us moving”.

She wrote: “This rise – a hammer blow for working people – did not have to happen.

“The Tories crashed the economy with last September’s disastrous mini-Budget and left you paying the price.”

She earlier said the latest rise will be “incredibly worrying for households across Britain already struggling to make ends meet”.

Prime Minister Rishi Sunak, who is on holiday in California, admitted “a lot of people are worried” about the rise in interest rates.

He tweeted: “The alternative would make inflation far worse, so what you buy becomes more expensive and what you save, worth less.”

In a video he posted on Twitter, he described inflation as “the single biggest challenge” facing the country and said halving it was his top priority this year.

Chancellor Jeremy Hunt said the plan to bring down inflation is working and needs to be continued.

He told Sky News: “If we stick to the plan, the bank forecasts inflation will be below 3% in a year’s time without the economy falling into a recession.

“But that doesn’t mean it’s easy for families facing higher mortgage bills so we will continue to do what we can to help households.

“The plan is working, but what we have to do as a government is that we stick to that plan, we don’t veer around like a shopping trolley.”