The Bank of England has hiked interest rates to 1% as it warned the economy will go into reverse and that inflation will peak at more than 10% as the Ukraine war compounds a crippling cost of living crisis.
Members of the Bank’s nine-strong Monetary Policy Committee voted 6-3 to increase rates from 0.75% to 1% - the fourth time they have voted for a rise in a row and taking rates to a level not seen since 2009.
In a grim set of forecasts, the Bank predicts growth will contract in the final three months of 2022 as the cost squeeze sees households rein in their spending.
Sky-high inflation will see household disposable income plunge by 1.75% this year - the second highest on record - while overall real income will tumble by an unprecedented 3.25% this year and fall again in 2023 before beginning to recover, the Bank cautioned.So, while the financial and economic prospects for the rest of the year look bleak, now is a good time to take a deep dive into your outgoings, subscriptions and spending habits to get some changes put in place that could help you pay the expected increases, and possibly have some cash to spare to spend over summer.WEALTH at work, a leading financial wellbeing and retirement specialist, has shared a list of things that people can do right now to help them take control of their finances fast.Work out exactly what your income is, and what liabilities you have - for example, mortgage, debt, childcare, insurance and utility bills.
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