IFS Warns of Hardship for Londoners and Younger Homeowners as Mortgage Rates and Rents Rise

The Institute for Fiscal Studies (IFS) has warned that Londoners and those under 40 will be hardest hit by the increasing mortgage rates and rising rents in Britain.

The IFS reported that inflation remained at 8.7% in May, with core inflation rising to 7.1%, the highest since 1992.

The UK's debt mountain also hit £2.6 trillion, and food inflation continued to affect family budgets.

The Bank of England's Monetary Policy Committee is meeting to discuss potential interest rate hikes, with some predicting a "jumbo hike" from 4.5% to 5%.

The IFS predicts that 1.4 million mortgage holders will see their payments increase by at least 20% of their disposable income, with about 690,000 of those aged under 40.

London will see the largest increase in monthly mortgage bills, at £520 on average, compared to £390 in the South-East.

Renters are also facing significant rent increases as landlords pass on the cost of rising mortgages.