Interest rates UK – latest: Lenders cut mortgage rates as banks urged to take action

The pain of soaring interest rates and inflation is a knock-on effect of the UK’s decision to leave the European Union, former Bank of England governor Mark Carney has said.

Mr Carney said that Thursday’s decision by the Bank’s Monetary Policy Committee to hike its base rate to a 33-year high of 3 per cent was in part forced on it by Brexit.

The rise – which will add hundreds of pounds to monthly mortgage bills – came as the Bank forecast as much as eight successive quarters of recession in the UK, stretching into 2024 in what could be the longest sustained downturn for a century.

Our political editor Andrew Woodcock reports:

A Labour shadow minister has said it is frustrating see the government take cuts to investments crucial to the “long-term prosperity of the country” in light of reports that the new Sizewell C plant in Suffolk is under review.

Shadow business secretary Jonathan Reynolds told Sky News: “What really frustrates me at the moment is that you’re seeing the government flying kites every day.

“The reality is they crashed the economy and they have got to take corrective action beause of it.

“What would really frustrate me would be cuts to the kind of investments that are crucial to the long term prosperity of the country,” he added.

“And what you see with the government flying these kites every day in the media before they give us some firm information,” which he argued further undermines confidence in the UK.

Martin Lewis has forewarned that the cost of living crisis will actually hit the British public harder next spring than it will this winter.

“My genuine concern is what happens next April when the price guarantee ends on energy, when we’re expecting to see mortgage rates probably at that peak and interest rates at their peak,” he told GMB.

The MoneySavingExpert founder called for the chancellor to make plans to “mitigate that damage to the individuals when it happens.”

Britain is facing the biggest interest rate hike since the 1980s.

Our video team has this report:

Ofgem has backed a National Grid ESO scheme that will allow Britons to earn financial rewards for saving power at times of peak demand.

Households and businesses, which must have smart meters to qualify for the scheme, will be told in advance that they should avoid using energy intensive appliances at a certain point on a particular day.

There will be at least 12 “demonstration days”, the National Grid said, during which the average household could earn up to £100.

Fintan Slye, the ESO’s executive director, said: “We are delighted that Ofgem have approved the use of our Demand Flexibility Service this winter.

“It will help mitigate the potential risks that the ESO has outlined in its Winter Outlook and will allow consumers to see a financial return for reducing their electricity use at peak times.

“As a responsible operator of the electricity system, we have developed this innovative Demand Flexibility Service to compliment the robust set of tools we already use to balance the electricity system every day.”

Ministers were today warned that pulling the plug on the proposed Sizewell Cnuclear power plant in Suffolk would deal a potentially fatal blow to the UK’s hopes of achieving its net-zero carbon commitments.

It is understood that the £30bn project – which was expected to provide up to 7 per cent of the UK’s electricity needs – could be delayed or scrapped as part of Rishi Sunak’s bid to fill a £50bn hole in the government’s finances.

Despite pleas from the CBI not to slash capital spending in chancellor Jeremy Hunt’s 17 November Autumn Statement, a senior Treasury source stressed they were rethinking “all capital spending”.

Our poltical editor Andrew Woodcock has more:

Downing Street has denied that the plan for a new nuclear power plant at Sizewell C in Suffolk is under review as part of Jeremy Hunt’s bid to fill a hole in the government’s finances.

Reports that the £30bn nuclear facility could be scrapped or delayed sparked alarm, with unions warning that ditching Sizewell would scupper the UK’s hopes of achieving net-zero carbon emissions.

Doubts over the future of the project – expected to supply up to 7 per cent of the UK’s electricity needs – were sparked by a BBC report quoting a goverment source as saying: “We are reviewing every major project – including Sizewell C.”

Political editor Andrew Woodcock has this breaking story:

Downing Street has said it is committed to the Integrated Rail Plan but that transport secretary Mark Harper is reviewing how high-speed services are accomplished.

The PM’s official spokesman said: “We are committed to the Integrated Rail Plan which delivers a high-speed line and transport improvements across the north, and the Government is of the view that this approach will deliver those benefits sooner than under alternative plans.

“There are a number of options on how we deliver those high-speed services to Leeds, for example, and the Transport Secretary is looking at those closely.”

Markets have traditionally been more anxious about Labour than the Tories, writes Andrew Grice.