Scots face mortgage spike as biggest interest rate rise since 1980s announced

dailyrecord.co.uk:

Scots face another spike in their mortgage payments after the biggest interest rate rise since the 1980s was announced today.

The Bank of England has hiked rates to three per cent - up from 2.25 per cent - in an attempt to bring runaway inflation under control.

The 0.75 per cent rise is the biggest single increase announced by the Bank since 1989.It will help pile around £3,000 per year on to mortgage bills for those households that are set to renew their mortgages, the Bank said.The Bank also warned that the UK could be on course for the longest recession since reliable records began in the 1920s.Gross domestic product (GDP) could shrink for every quarter for two years, with growth only coming back in the middle of 2024.The economy has faced similarly long recessions in the past, but then the quarterly drops have been broken up with an occasional positive quarter.Kate Bell, head of economics at the Trade Union Congress (TUC), warned of a "bleak recession" to come. "Workers are paying a high price for the Conservatives crashing the economy,” she said."Today’s interest hike will increase the risk of a bleak recession this winter and it will hammer businesses and people paying a mortgage."We need a new economic plan with growing wages and strong public services at its heart.

And we need a general election now, to replace the party that created this crisis."Responding to the interest rate rise, Chancellor Jeremy Hunt said: "Inflation is the enemy and is weighing heavily on families, pensioners and businesses across the country."That is why this Government’s number one priority is to grip inflation, and today the Bank has taken action in line with their objective to return inflation to target."Interest rates are rising