Tough times ahead, warns Jeremy Hunt after interest rate hike

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Asked whether Tory incompetence was to blame for the country’s economic problems, the Chancellor said: “What my party has done is put in place a new Prime Minister.

“We also have a new Chancellor of the Exchequer.”

Mr Hunt said the PM recognised the problem when he entered Downing Street and said “he was there to fix that” while the Chancellor said he had reversed the measures in his predecessor’s mini-budget within days of entering No 11.

Yesterday’s increase in interest rates will pile around £3,000 per year on mortgage bills for households set to renew their home loans.

Mr Hunt said: “Today’s news is going to be very tough for families with mortgages up and down the country, for businesses with loans.

“But there is a global economic crisis, the International Monetary Fund says a third of the world’s economy is now in recession.”

Speaking to reporters in Carshalton, south London, he said: “The best thing the Government can do if we want to bring down these rises in interest rates is to show that we are bringing down our debt.

“Families up and down the country have to balance their accounts at home and we must do the same as a government.”

The Chancellor is expected to set out a package of tax rises and spending cuts in his November 17 autumn statement.

He said: “Sound money and a stable economy are the best ways to deliver lower mortgage rates, more jobs and long-term growth.

“However, there are no easy options and we will need to take difficult decisions on tax and spending to get there.”

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