Labour has accused Rishi Sunak of being “personally responsible” for what it branded a £1.05 billion “Tory mortgage penalty” ahead of another predicted rise in interest rates.
Shadow chancellor Rachel Reeves has told the Prime Minister to “take his fingers out of his ears” as the financial burden on homeowners continues to leave “so many worse off”.
Households have paid £1.05 billion in higher mortgage payments since former prime minister Liz Truss’s disastrous mini-budget last year, according to Labour’s analysis of research by the Resolution Foundation think tank.
This created the perfect conditions for Ms Truss to “(light) the fuse” with the economic plan which caused chaos in the financial markets and sent mortgage rates soaring.
Almost three-quarter of a million households missed their rent or mortgage payment in April, according to the latest Which? Consumer Insight Tracker.
Ms Reeves said that “after 13 years of Tory economic failure, everyone is feeling worse off – and far too many people will be wracked with worry again as they wait for the interest rates decision to land”.
“The Prime Minister should take his fingers out of his ears and admit his personal responsibility for a Tory mortgage crisis leaving so many worse off,” she added.
“He trapped our economy in a cycle of low growth and high taxes, while tickling the tummies of unfunded, trickle down tax extremists in his party. Liz Truss simply came and lit the fuse.
“He should bring in a proper windfall tax on the enormous profits of oil and gas giants now to support working people, and lift us out of this crisis.”
Economists predict it is not ready to stop the increase as soaring food prices has kept UK inflation elevated.
Market expectations have risen over the past month and markets are now expecting rates to peak at either 4.75% or 5% this year.
It dashes previous hopes that the Bank could stop pushing through rate hikes earlier in the year, and means more pressure is set to be piled on already strained borrowers.
Another 0.25 percentage point increase on Thursday, taking the bank rate to 4.5%, is expected by economists including at Oxford Economics and Investec Economics.
Tory Party chairman Greg Hands dismissed the claims as “absurd” and hit out at Labour’s record on the economy.
“These are absurd claims by a Labour Party which always leaves the economy in a worse place than they find it and the British people paying for it,” he said.
“The Conservative Government is providing immediate relief to families now by paying half of people’s energy bills as part of our £94 billion cost-of-living package.
“We will deliver on our priorities to halve inflation, grow the economy, reduce debt, cut waiting lists and stop the boats.”