Chancellor Jeremy Hunt has ruled out any possibility of government aid with mortgages and a cap on sky-high supermarket prices over fears of tempting inflation.
“Schemes which involve injecting large amounts of cash into the economy right now will be inflationary,” he told the House of Commons on Tuesday.
“We won't do anything that would mean we prolong inflation,” he added, after Kantar reported grocery inflation remained in the double digits at 16.5% in June.
Hunt was also speaking as UK lenders scramble to lift mortgage interest rates ahead of an expected further Bank of England interest rate hike on Thursday.
Higher interest rates have begun to bite homeowners, with first-time buyers facing a significantly reduced product range and those re-mortgaging hit with higher rates.
MoneySavingExpert founder Martin Lewis commented that the UK’s mortgage “ticking time bomb” had now “exploded,” warning that sustained high-interest rates would lead to households having to readjust finances.
“Waiting for it to happen would be too late,” he told ITV’s Good Morning Britain, “yet now, the timebomb has exploded, and we’re scrambling about what to do.
“I can’t see this government bringing in a mortgage rescue package, even if it wanted to do so.”
Official inflation data is due on Wednesday, ahead of the Bank of England’s inflation rate call on Thursday, which analysts have tipped will likely mark a thirteenth consecutive hike by the central bank.