Families face more woe as Bank of England set for another rate rise

Alarm bells have sounded over millions of Brits’ finances as they struggle amid rising interest rates, with the Bank of England set to up the ante again this week.

The Bank’s benchmark base rate is expected to rise by another quarter percentage point to 5.25 per cent on Thursday – the 14th rise in a row.

There have been fears over mounting debts for families using short-term credit to cover essential costs, as well as concerns over rising mortgage costs.

Some 2.3m low-income families have taken out loans or used credit to pay household bills during the cost of living crisis, according to analysis from the Joseph Rowntree Foundation (JRF).

Rachelle Earwaker, senior economist at JRF, said: ‘The cost of living crisis is entering a dangerous new phase.’

Concern:  There have been fears over mounting debts for families using short-term credit to cover essential costs, as well as concerns over rising mortgage costs

‘Despite inflation falling back, we risk the tragedy of a second wave in this crisis, as millions struggle to maintain their borrowing in view of rising interest rates.

‘The fragility of the current situation ought to be a preoccupation for policymakers everywhere but, on the contrary, it is in danger of being overlooked.’