Interest rates: What will the Bank of England increase mean for mortgages and house prices?

The two million people with variable rate mortgages are particularly vulnerable to the rise in interest rates, while first-time buyers are expected to find it more of a struggle to get on the property ladder, writes Samuel Lovett

Uneasy street: The Bank of England’s base rate rise to 1.75% is increasing the debt burden for millions (PA Archive)

Households face the longest and deepest fall in living standards on record as energy bills triple and the UK plunges into a deep and protracted recession, the Bank of England has warned, in one of its bleakest ever assessments of the economy.

The cost of living crisis will continue throughout next year and only begin to ease in 2024, with the UK economy contracting for five consecutive quarters, according to the Bank’s latest forecasts.

Inflation is set to surge to 13.3 per cent this winter when soaring gas prices mean that consumers face average energy bills of £3,500, up from £1,200 a year ago, the Bank said.