Interest rates are set to quadruple within a year adding more than £100 a month to a typical mortgage, according to Bank of England senior adviser Andrew Sentance.
As if things weren't bad enough with current high rates, welfare and public sector cuts, we're now being warned of a rate rise from 0.5% to 2% as officials struggle to get to grips with spiraling inflation, says Sentance of the Bank’s Monetary Policy Committee.
The warning comes as a recent study revealed families are facing the biggest squeeze in household incomes since 1921, and economists say the impact of the drop in spending power and living standards is bigger than the depression of the 1930s.
A family currently paying a £635 per month on a £150, 000 tracker mortgage would suddenly be hit with repayments hiking up to £750 per month if interest rates rise to 2%.
This is a really harsh blow that could push millions of families with tracker mortgages into immediate and permanent financial problems - as if we're not struggling enough.
Photo: pickrent.com (Flickr)
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