BRITS face an even bigger hit to their wallets with experts predicting two more interest rate hikes to tackle red hot inflation.
Latest UK data shows inflation — which measures the rate of price rises — is still five times the Bank of England’s two per cent target.
Brits face an even bigger hit to their wallets with experts predicting two more interest rate hikes to tackle red hot inflationCredit: Getty
Food prices are at a 50 year record high
Official figures yesterday showed overall consumer price inflation edged down from 10.4 per cent to 10.1 per cent in March — largely due to an 8.4 per cent fall in the price of petrol.
However, food inflation is now at the highest level since 1977.
Financial traders hoped the Bank would start easing off on rate rises.
But stubbornly high inflation has prompted markets to expect the Bank to raise rates from 4.25 per cent by at least 0.25 percentage points in May and another 0.25 percentage points in June.
Markets reckon interest rates — which set the level for borrowing, including mortgages — are set to hit a peak of five per cent.
The Institute of Directors said the Bank’s monetary policy committee needs to raise rates at its next meeting to “address the underlying issues”.
Chancellor Jeremy Hunt said the figures reaffirm the need to continue efforts to drive down inflation.