More pain in store – tough-talking Bank raises UK interest rates and a few eyebrows

Higher interest rates mean mortgages and rents will rise, and stay high for at least two years. Photograph: Justin Tallis/AFP/Getty

If it isn’t hurting it isn’t working. That was the message from John Major, then chancellor, in 1989 during a previous period when interest rates were being used to combat high inflation. And it was the message rammed home by the Bank of England on Thursday.

Any hard-pressed households or struggling business looking for comfort from Threadneedle Street would have been disappointed by news that the pain will continue and is likely to intensify. Interest rates are unlikely to have peaked, and the only real question is how much further they have to rise.