The Bank of England has unexpectedly pushed up interest rates to 5%, the highest rate in almost 15 years, as policymakers and the UK Government come under mounting pressure to control the cost of living crisis. 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. Governor of the Bank of England Andrew Bailey said: "The economy is doing better than expected, but inflation is still too high and we've got to deal with it. We know this is hard - many people with mortgages or loans will be understandably worried about what this means for them, but if we don't raise rates now, it could be worse later."
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.
