Bank of England should bring next interest rate rise forward to next week in battle to control inflation, says leading banker
will go the top 10 percent of earners, analysis has found as higher mortgages could wipe out tax savings for the lower paid.the wealthiest 10 per cent of the population will receive 48 per cent of the gains from Mr Kwarteng’s tax cutsAt the other end of the earnings scale, the IPPR found that the poorest 10 per cent of society will see less than 1 per cent of the financial benefit, with the poorer half of society sharing just 12 per cent of the tax savings.
Robert Salter, a partner at Blick Rothenberg, said: “For the wider population, it appears that any tax decreases that they might benefit from could be fully eaten up by the mortgage interest increases that have already been announced. Someone earning £50,000 a year will save £842.18 from Mr Kwarteng’s tax cuts, but if they have a £250,000 mortgage those savings could wiped out with an additional £1,188 annual repayment, and more if they can only secure a mortgage with a loan rate of more than 3.75 per cent.Even with a mortgage of £600,000 they would pay just an additional £1,900 on their annual mortgage repayments, based on Thursday 0.5 point rise in interest rates.
He added this would be a strong signal by the Bank of England that it was willing to do “whatever it takes” to bring inflation down quickly. Sir John Gieve, who is also a former member of the Bank’s MPC from 2006 to 2009, said that the Government’s efforts to grow the economy were working in opposition to the Bank’s attempts to tame inflation.
People living in the London and the South East of England will see substantially larger gains than those living in the rest of the country. Londoners will see double the income growth compared with households in Northern Ireland.