Homeowners could see their annual mortgage repayments go up by hundreds of pounds after the Bank of England unveiled the biggest interest rate rise in more than 30 years.

The Bank’s nine-strong Monetary Policy Committee decided to hike the base interest rate from 2.25% to 3%, the highest since 2008.

The 0.75 percentage point jump is the biggest single increase since 1989.

Mortgages are decided against this rate. Borrowers with a £200,000 standard variable mortgage could see their repayments rise by more than £1,000 a year.

The bad news was compounded by a warning from one of Jeremy Hunt’s advisers that interest rates may need to soar to 5% over the next few months to get a grip on runaway inflation.

Mr Hunt has already faced calls to come to the Commons or give a press conference to explain how mortgage-holders will be helped following the predicted hike in interest rates.

Liberal Democrat Treasury spokeswoman Sarah Olney said: ‘The Chancellor must address the country immediately after the rate rise decision to spell out a plan to save homeowners on the brink.

‘He should either come to Parliament or hold a press conference to announce support for families facing mortgage bill rises worth hundreds of pounds a month.

‘Hard-working families are being left to pay the price for weeks of Conservative chaos. People are desperately worried about how they are going to pay these frightening mortgage payments after tomorrow.

‘The Government cannot hide away, especially after their long list of economic failures.’

The Chancellor is expected to announce tax rises for millions of households and a squeeze on spending in his Autumn Budget later this month to address a £50 billion black hole in the public finances.

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