The Bank of England has raised interest rates to 5% from 4.5%, the highest rate in 15 years.
The move is set to deepen the mortgage crisis as borrowing costs are hiked up for the 13th time in a row. The 0.5 percentage point increase was the sharpest increase since February, surprising economists who had been expecting a smaller hike of 0.25 percentage points.
It follows a higher-than-expected inflation reading in May as continued price rises forced policymakers into action in a bid to bring inflation down to the 2% target. It comes amid growing calls for the Government to do more to help mortgage borrowers who are set for a big jump in their monthly repayments.
