Robison challenges UK Government to do more on living costs as rates rise again

The UK Government must do more to help those struggling with the cost of living, the Deputy First Minister said as interest rates were raised to their highest level for almost 15 years.

Shona Robison was speaking after the Bank of England pushed up rates by half a percentage point to 5% on Thursday.

Prime Minister Rishi Sunak conceded soaring interest rates are “hard” for cash-strapped Britons, with many households hit by rising mortgage costs as a result.

Ms Robison, who met Chief Secretary to the Treasury John Glen in Cardiff on Thursday, insisted the UK Government could do more.

She said: “Given that we are experiencing record falls in living standards, the Scottish Government has repeatedly asked the UK Government to do more to support those most impacted by increasing inflation, interest rates and living costs.

“With interest rates having risen yet again, I made this case once more to the Chief Secretary to the Treasury.”

She added that in recognition of the “growing pressures on family budgets”, the Scottish Government had “allocated almost £3 billion, both last year and this, to support policies which tackle poverty and to protect people as far as possible during the cost-of-living crisis”.

Her comments came after the Prime Minister said interest rates had to rise because “inflation is too high and we’ve got to bring it down”.

He added that high levels of inflation “makes everybody poorer”, saying: “That’s why we’ve got to grip it, we’ve got to reduce it, and interest rates are a part of that.

“I always said this would be hard, and clearly it’s got harder over the past few months, but it’s important that we do do that.”

Scottish Labour housing spokesman Mark Griffin said the latest rates rise means “thousands of Scots are likely to see their mortgage rates soar once again”.

He added: “This economic chaos caused by the Tories is making Scots poorer every day.”

Meanwhile, Citizens Advice Scotland (CAS) warned household budgets will be “hammered” by the rise.

Its financial health spokeswoman Sarah-Jayne Dunn said staff are now seeing people having to go into debt “to meet essential living costs like food, energy, and shelter”.

She added: “People taking on new debt on these circumstances could see that line of credit cost even more. It becomes a vicious cycle, trapping people in rising debt.

“The risk this also poses to homeowners set to come off fixed term deals, or on variable rate mortgages, is significant.

“This crisis is going to cast a long and looming shadow for years to come.

“With the looming risk of recession, essential costs going up and the cost of borrowing for many going up, it’s understandable that people will feel anxious and worried.”

The Federation of Small Business in Scotland also warned the rise in rates will have “significant consequences”.

Its Scotland policy chair Andrew McRae said “There has been a grim inevitability about the successive interest rate hike announcements we’ve had to sit and watch over the last year.

“We of course need to get inflation down, but this decision will have far-reaching consequences.

“As small businesses look to trade the country back to economic recovery, this will come as a cruel blow to their plans.

“We know that smaller firms already find it harder to access finance, so making debt more expensive will surely put a further dent in their chances, affecting their margins and rippling through their business.”