Interest rates are set to rise AGAIN with Bank of England taking base above 1 per cent

The Bank of England is poised to raise interest rates again today as it tries to get a grip on rampant inflation.

Officials on Threadneedle Street have already bumped up rates four times since December in an unprecedented fight against the rising cost of living.

Prices jumped by 9 per cent in the year to April – the highest rate of inflation since the 1980s.

But a further hike today, taking the Bank’s base rate above 1 per cent for the first time since 2009, will pile more pressure on mortgage holders and other borrowers as the cost of their debt creeps up.

If the Bank bumps up rates to 1.25 per cent, this will add another £18 per month on to the cost of a £150,000 variable rate mortgage, according to personal finance site Moneycomms.

Another interest rate hike from the Bank of England would be a ‘hammer blow to households up and down the country who are facing a tsunami of increased costs for essential goods and services’

Compared with last November, when the base rate was at 0.1 per cent, owners would be forking out an extra £87 per month. And if officials decide to take the more unusual step of pushing up rates by 0.5 percentage points to 1.5 per cent, in a more aggressive effort to bring down inflation, the squeeze will be even more obvious.

Andrew Hagger of Moneycomms said another rise would be a ‘hammer blow to households up and down the country who are facing a tsunami of increased costs for essential goods and services’.

Officials on the Bank of England’s rate-setting monetary policy committee will have been keeping a close eye on the latest decision from their American peers at the Federal Reserve last night. As anticipated, it decided to bump up rates by 0.75 percentage points.