The Bank of England has announced the biggest interest rates hike in 30 years as the bank seeks to tame high inflation.
Interest rates rose by 0.75% today meaning they now sit at 3%, which is the highest interest rate since 1989.
This is the eighth increase since December 2021.
This decision was made to inflate interest rates as the UK battles high inflation – which is also at a 40 year high.
Guy Watts, 58, a self-employed homeowner from Somerset, spoke to BBC News about his financial concerns.
He said: “I’ve cut really far back on expenditures. I’m really careful with gas and electricity. I’m careful buying food. I’m not going on holiday at all.
“All my household bills [are going] up substantially which makes things a lot harder – but the mortgage is the one that is the worst.”
Borrowing money from banks will also become more expensive and home owners monthly mortgage payments will inevitably rise.
Home owners across the country are concerned about keeping up with their mortgage payments as it is reported they could rise by £3000.
Which means the poorest households will be hit the hardest.
This comes after the Truss government in September announced their mini budget which decreased the value of the pound.
Interest rates are expected to rise more within the year but could drop “sharply” in the middle of 2023.
After the Bank of England announcement, the pound has now again decreased against the dollar and the euro.
