he UK has “no alternative” however to lift rates of interest in an effort to carry down inflation, Chancellor Jeremy Hunt has warned.

Households are braced for an additional improve in charges – which already sit at a 14-year-high of 4.5% – from the Bank of England subsequent week.

Mr Hunt stated the Government can be “unstinting” in supporting the central financial institution in its efforts to grapple rampant inflation and try and carry it again in direction of a goal of two%.

The Chancellor advised Sky News: “We understand that there is real pressure on families with mortgages, on businesses with loans, as interest rates go up.

“We are doing what we can to help people through a difficult patch.

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“In the end, there is no alternative to bringing down inflation if we want to see consumers spending, if we want to see businesses investing, if we want to see long-term growth and prosperity.

“And that’s why we will be unstinting in our support for the Bank of England as they go about their job to bring down inflation.”

The central financial institution’s financial coverage committee (MPC) will vote subsequent week over one other potential improve to rates of interest, with economists broadly predicting they may again a thirteenth consecutive rise.

Earlier on Wednesday, the Office for National Statistics (ONS) revealed that the UK financial system grew 0.2% in April, as constructive client spending was partially offset by the affect of upper mortgage charges on the development and property company sectors.

It got here a day after contemporary information confirmed that common common wages, not together with bonuses, jumped 7.2% greater within the three months to April, up from 6.8% within the three months to March.

The higher-than-expected wage rise stoked additional solutions that inflation may very well be extra persistent than anticipated and doubtlessly threaten the Government’s pledge to halve inflation in 2023.

Downing Street individually stated on Wednesday that the Government was “conscious about the potential for a wage-price spiral” and that's the reason “difficult decisions” had been being made about public sector pay.

The Prime Minister’s official spokesman stated: “We know we can’t have high growth with high inflation, that’s why halving inflation is one of the Prime Minister’s key priorities.

“We are working with the Bank of England to drive that down – they are ultimately responsible for setting interest rates.”

Economists predicted that the central financial institution may have been placed on edge by continued excessive inflation and are more likely to hike charges to a minimum of 5%, with the monetary markets at present pricing in a peak doubtlessly at 5.5%.

Thomas Pugh, economist at RSM UK, stated: “The labour market is not easing quickly enough for the MPC to be comfortable – that points to another 25bps (basis points) rate hike in June, and raises the chances of a 50bps hike, although that is not our base case.

“We expect rate hikes in June and August to take interest rates to 5% before the MPC pauses.”