Inflation is now forecast to hit 11 per cent in October, says Bank of England

Inflation is forecast to hit 11 per cent in October, the Bank of England has said, prompting renewed fears for how millions of struggling Brits will cope.

The bank has raised interest rates from 1 per cent to 1.25 per cent in a bid to curb inflation, making it more expensive for businesses to borrow and grow, but this will push up mortgages and credit card payments for families nationwide.

Soaring prices mean inflation will hit the highest level since 1981, with last month’s forecast of 10 per cent revised upwards.

The Bank of England’s target rate of inflation is two per cent. Measures are aimed at meeting that, with prices for ordinary grocery items already shooting up.

As of April, 500g of beef mince had risen from £2.02 to £2.34, and 600g of chicken breast from £3.22 to £3.50. The bank has warned it will “act forcefully” if necessary.

However, the move to increase the cost of borrowing has been met with concern over its impact on those struggling to get by.

Pat McFadden MP, Labour’s Shadow Chief Secretary to the Treasury, said: “This underlines the seriousness of the situation facing the economy. Many families will be worrying about the impact this will have on their household bills.

“We need a plan for a stronger, more stable economy, that can weather the short-term issues and fix the foundations for the long-term.”

Citizens Advice Bureaus have been seeing growing numbers of people unable to cope with the combination of flat wages and rising prices, said Myles Fitt of Citizens Advice Scotland.

“So many households in Scotland are struggling to make ends meet already. With energy bills, petrol costs and other payments higher than ever while wages stagnate, CABs are seeing increasing numbers of people who are just unable to cope,” Fitt said.

“Today’s rise in interest rates will hit such people hard, making it even harder for them to meet their daily living costs. Governments need to recognise the scale of the crisis and make more support available to those who are struggling.

“In the meantime anyone who needs help with their finances can get free, confidential advice from their local CAB, or at our self-help tool www.moneymap.scot.”