Families face soaring bills after Bank of England predicts inflation will hit 5% by April

FAMILIES face more bills misery after the Bank of England yesterday predicted that inflation would hit five per cent next April.

The Bank says the cost of living — 3.1 per cent in September — will soar on the back of rising food and energy costs.

It believes inflation hit four per cent in October — and that increases are coming.

Despite the rising pressures on households and businesses, policymakers decided to hold interest rates at their record low of 0.1 per cent.

Experts had expected them to rise to at least 0.25 to keep inflation under control.

Financial markets reckon rates could hit one per cent by the end of next year.

Citizens Advice said families are struggling — with demand for guidance on accessing charitable support and food banks 36 per cent up on this time last year.

James Smith, at the Resolution Foundation think tank, said: “Rising inflation is the biggest risk to living standards over the next six months, with pay packets and households incomes set to start shrinking in early 2022 — for the third time in a decade.”

Danni Hewson at stockbroker AJ Bell, predicted some family budgets would be stretched “to breaking point”.

The Bank of England does not expect inflation to fall below three per cent until the spring of 2023.

That is still above its target of two per cent.

Governor Andrew Bailey said he is prepared to raise them in “coming months” to keep inflation in check.