Rishi Sunak told the cabinet that interest rates are expected to rise to 2.5% next year, as he warned ministers not to take out more loans to finance public spending.
The chancellor told colleagues on Tuesday that homeowners could see their mortgage payments rise by more than £ 1,000 a year if they do not enter into fixed-rate deals.
He said financial markets have already priced in a series of interest rate rises, which could reach 2.5 per cent, adding that borrowing risks further fuel inflation.
A 1 percentage point increase on a typical mortgage is equivalent to £ 700, he said, arguing that reducing the deficit is vital to keeping interest rates down.
Sunak is under pressure from Tory MPs and some
Add Comment