Socialist Worker

Interest rate rise will add to pressure on the poor

Issue No. 2777

Higher interests will hit the poor

Higher interests will hit the poor


The Bank of England is preparing to raise interest rates in a move that will hit millions of mortgage payers and private renters.

The bank’s governor, Andrew Bailey, warned on Sunday that it will “have to act” to curb rising inflation.

Many are speculating that the first interest rate hike will come next month—and that more could follow.

Rising interest rates increase the cost of borrowing. That means tens of millions of people who have bought their houses with a loan will pay more.

But the rise will also likely find its way into higher private sector rents too.

The climbing cost of living is already hitting working class people hard.

The RPI measure of inflation has surged to 4.8 percent, household fuel bills spiral upwards and food prices are on the rise.

Combined

Those most reliant on benefits are taking the biggest blows as the Tories refuse to raise them in line with rising bills.

The £20 a week Universal Credit cut, combined with the Tories’ ending of the furlough scheme, will plunge many people into poverty.

And, despite talk of rising wages due to labour shortages, millions of workers face “pay freezes” and real-terms pay cuts.

That means their standards of living are falling at a time when the very richest are grabbing an ever-greater share.

According to The Sunday Times Rich List the combined wealth of Britain’s 250 richest people has grown by a sixth in the past year.

It is up from £566 billion to £658 billion.

That’s why there needs to be a combined fight over pay and benefits—and why the union leaders should sound a battle cry.


Youth homelessness rises

Youth homelessness in Britain has increased by an estimated two-fifths in five years, rising to more than 120,000, a leading charity director has warned.

And black African and African-Caribbean households are likely to be disproportionately affected.

Seyi Obakin, the chief executive of Centrepoint, a youth homelessness charity, said its estimates show 86,000 young people in Britain presented to their local authority as homeless or at risk in 2016-17.

That figure increased to 121,000 in 2019-20. Obakin expressed fears that youth homelessness would worsen as a result of the pandemic, with Centrepoint’s helpline receiving a record number of calls since the start of the crisis.

He also believes young black Britons will probably be heavily affected. Analysis by the Guardian newspaper shows that although England’s black population stands at about 3.5 percent, black households make up 10 percent of those that are homeless or at risk of homelessness.


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