The Bank of England is set to increase interest rates after the chancellor promised another £150bn for public services on Wednesday.
The move would make the BoE the world’s first central bank to hike rates since the pandemic.
Markets are now certain that the base rate will rise from 0.1% to 0.25% next Thursday, and believe that it could hit 1% next May, four months earlier than they were expecting on Tuesday.
Lenders including HSBC, NatWest and Barclays have already raised mortgage rates as they price in a predicted rise, while the OBR says interest payments could rise by 13% in 2023.
