Exclusive

'There is light at the end of the tunnel': Rishi Sunak assures homeowners as interest rates set to hit 15-year high

2 August 2023, 18:13 | Updated: 2 August 2023, 18:25

The Bank of England is expected to rise the interest rate to 5.25 percent tomorrow.
The Bank of England is expected to rise the interest rate to 5.25 percent tomorrow. Picture: LBC/Getty

By Chay Quinn

The Bank of England is set to raise interest rates to 5.25 percent tomorrow - their highest rate since the financial crash despite Rishi Sunak saying there is "light at the end of the tunnel" in the cost-of-living crisis.

The further pain on borrowers comes despite Prime Minister Rishi Sunak telling LBC that there is "light at the end of the tunnel" regarding the cost-of-living crisis.

The central bank policymakers are expected to vote through the fourteenth rise in the base rate tomorrow - with Sunak taking calls from worried voters with Nick Ferrari ahead of the announcement.

Interest rate rises are intended to dampen rising inflation - with the last half-point jump coming on the back of an easing of price increases to 7.9% year-on-year in June.

Read More: Woman who led Northern Rock response chosen as Bank of England’s deputy governor

Read More: 'A liar': Riled publican who heckled Rishi Sunak at beer festival says the PM's 'no better than his predecessors'

Mr Sunak told LBC’s Nick Ferrari: “I know families are struggling with the cost of living and that’s why I set it out as my first priority to halve inflation, and we’re making progress.

The Bank of England is expected to rise the interest rate to 5.25 percent tomorrow.
The Bank of England is expected to rise the interest rate to 5.25 percent tomorrow. Picture: Alamy
Rishi Sunak does a phone-in on LBC
The Prime Minister made it his Government’s top priority to halve inflation – a measure of how much prices for goods and services have increased over time – in 2023. Picture: LBC

“Is that as fast as I’d like? No. Is it as fast as anyone would like? No. But the numbers most recently that we had show that we’re heading in the right direction, inflation is coming down, and I think people can see light at the end of the tunnel."

The Prime Minister made it his Government’s top priority to halve inflation – a measure of how much prices for goods and services have increased over time – in 2023.

The rate needs to be around 5% or lower by the end of the year for Mr Sunak to meet his pledge, with Consumer Prices Index inflation at 7.9% in June – down from 8.7% in May and the lowest rate since March 2022.

Mr Sunak told LBC’s Nick Ferrari: “I know families are struggling with the cost of living and that’s why I set it out as my first priority to halve inflation, and we’re making progress.

Andrew Bailey's BoE will make the damaging rise tomorrow
Andrew Bailey's BoE will make the damaging rise tomorrow. Picture: Getty

“Is that as fast as I’d like? No. Is it as fast as anyone would like? No. But the numbers most recently that we had show that we’re heading in the right direction, inflation is coming down, and I think people can see light at the end of the tunnel.

“But, look, we’ve got to stick to the plan, it’s not easy to bring down inflation. It requires me to make difficult but responsible decisions on behalf of the country.

“They’re not easy, I get flak for them, but I’m going to do them because they’re the right thing for everybody in the long term, and I’m determined to stick to the course and bring down inflation for everyone.”

After hearing from a caller about their mortgage situation, Mr Sunak said: “It’s inflation that’s causing everyone problems with their bills, it’s inflation which means the Bank of England is having to put up interest rates.

More Latest News

See more More Latest News

Sir Chris Hoy said 'if you're over the age of 45, go and ask your doctor' for screening

Sir Chris Hoy calls for men to be offered prostate cancer screening from the age of 45 after his terminal diagnosis

Kamala Harris went door-knocking in Pennsylvania on the night before the election

Kamala Harris surprises residents in Pennsylvania as she goes door-knocking in final bid to win votes

Nearly 600 police officers sacked in a year amid as shocking figures reveal extent of misconduct crackdown

Nearly 600 police officers sacked in a year as shocking figures reveal extent of misconduct crackdown

Hundreds of people died in the devastating flooding in Spain

British man who survived Valencia floods describes hearing his neighbours’ horrifying final screams before they died

Amy Dowden said she was ‘heartbroken' as she left this year's Strictly Come Dancing

Amy Dowden says her ‘heart is breaking’ after she confirmed she will not return to Strictly

Anthony Scaramucci said the row between Trump and Labour would blow over

'Anglophile' Trump's row with Starmer will have 'no impact' on wider relations with UK, Anthony Scaramucci says

Nick Ferrari attends his first Trump rally in Pennsylvania as he meets the crowd in 'the poorest city in the United States'

Nick Ferrari attends his first Trump rally in Pennsylvania as he meets the crowd in 'the poorest city in the US'

Exclusive
Nick Ferrari bumps into Nigel Farage in Pennsylvania as he reflects on Trump's "remarkable" foreign policy achievements

Nick Ferrari bumps into Nigel Farage in Pennsylvania as he reflects on Trump's 'near-death' experience

Live
US Presidential Election 2024 LIVE: Millions of Americans head to the polls as election day arrives

US Presidential Election 2024 LIVE: Millions of Americans head to the polls in the final race for the White House

Proud Boys claim they will go to voting places as Trump repeats election fraud lies.

Proud Boys making plans to mobilise as Trump repeats election fraud lies

File photo of a real NHS dentist

Desperate Brits fall for scam 'fake NHS dentists' amid years-long waits for appointments

The Kremlin is suspected of plotting the attack

'Parcel bombs' that blew up in warehouse were 'rehearsal' for Russian explosion attack on flight to US

Keir Starmer is not set to ban smoking in pub gardens, contrary to earlier reports

Cigarettes will not be banned in pub gardens under new Labour plan create 'smoke-free generation'

Former President Donald Trump speaks at a campaign rally in Reading, Pennsylvania

Trump threatens Mexico with 100% tariffs unless it cracks down on border crossings

Bridget Phillipson told Tonight with Andrew Marr that the fee hike was necessary to secure the future of universities.

‘Universities must reform’ says education secretary after first hike in tuition fees in 8 years

Two more cases of a new strain of mpox have been detected in the UK, officials say

Two more cases of new mpox strain detected in UK