Rishi Sunak and Jeremy Hunt have been accused of “burying their heads in the sand” after they insisted they won’t change course despite interest rates soaring.
The Bank of England today announced that they were hiking the rate by half a percentage point to 5% - higher than most experts had expected.
That came after yesterday’s grim news that inflation was stuck at 8.7% - well off Sunak’s target of halving it by the end of the year.
Even more worryingly, so-called “core inflation” stripping out volatile goods like food and energy, actually rose to 7.1%.
Reacting to the Bank of England announcement, chancellor Hunt said: “High inflation is a destabilising force eating into pay cheques and slowing growth.
“Core inflation is higher in 14 EU countries and interest rates are rising around the world, but the lesson from other countries is that if you stick to your guns, you bring inflation down.
“Our resolve to do this is watertight because it is the only long-term way to relieve pressure on families with mortgages. If we don’t act now, it will be worse later”.
But Rachel Reeves, Labour’s shadow chancellor, said: “Families across Britain will be desperately worried about what today’s interest rate rise might mean for them. They want to know that support will be there if they need it.
“Instead the chancellor and prime minister are burying their heads in the sand and failing to clean up the mess this Tory government has made.”
Lib Dem leader Ed Davey said: “Homeowners are being treated as collateral damage by Rishi Sunak.
“This latest rate rise will scar family finances for years to come, all because this Conservative government crashed the economy and sent mortgages spiralling.
“It is heartbreaking that this could lead to people losing their family home through no fault of their own.
“Rishi Sunak needs to provide targeted support to those hardest hit, instead of cruelly standing by as people worry about keeping a roof over their head.”