Lord Heseltine, who served as Margaret Thatcher’s deputy prime minister, has warned that Britain is heading towards a “nasty” rise in interest rates. Speaking to Sky News this morning, he said if he was Chancellor “I would be extremely worried”. The Conservative Party stalwart warned that a series of economic crises are going to come “fast and thick” in the next few months.
Lord Heseltine explained: “We are heading towards a significant increase in inflation.
“This will lead to increases in interest rates.
“If I was Chancellor I would be extremely worried about the demand.
“These crises in industry after industry are going to come fast and thick in the ensuing months and every time there are going to be more demands for taxpayers’ money.”
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He continued: “What they never tell you is that there will be interest rate increases which will impact very dramatically on very large numbers of people particularly those with mortgages.
“It is a very nasty, very complicated situation.
“We are already running on borrowed time in economic terms.”
The Bank of England has predicted inflation will rise above four percent by the end of the year, as its monetary policy committee (MPC) currently holds interest rates at 0.1 percent.
An increase would the first rate rise since 2018, which would also spark a rise in bills for millions of households on variable mortgages.
Households are already facing a £400-a-year rise in gas and electricity bills from next April.
Former Chancellor Lord Lamont echoed this warning, as he called for an interest rate hike to ease the risks from inflation.
The latest Office for National Statistics survey showed that 10 percent of businesses reported increasing the price of goods and services in early September.