Eastwood: Recession will devastate working households, first time buyers, business

He was speaking following the announcement by the Bank of England that interest rates will increase by half a percentage point to 1.75%, the biggest rise for 27 years.

This, said Mr. Eastwood, will stifle the hopes and ambitions of a new generation of young people who will become locked out of borrowing to buy a home or start a business.

The SDLP Leader has said that radical multilateral intervention is now required to save working families, prevent a 2008-style crunch on household finances and ensure that multinational oil and gas companies are not allowed to make a fortune on the backs of hard working people.

“Today’s recession forecast and interest rate hike by the Bank of England will cast a familiar sense of dread over people and families who remember the pain of the 2008 global financial crash.

"The inevitable outcome of these decisions is that people will no longer be able to access finance at rates that meet their immediate needs meaning that starting a family, buying a home or creating a business will be placed out of reach for many," he said.

He was speaking after Andrew Bailey, the bank's governor, confirmed on Thursday that the Bank of England’s Monetary Policy Committee (MPC) at a meeting on Wednesday, voted by a majority of 8-1 to increase the Bank Rate by 0.5 percentage points, to 1.75%.

Mr. Bailey warned of bleak economic prospects ahead, predicting a recession in the United Kingdom in the autumn.

“The greed-driven economy that has been nurtured by this British Government, and which looks certain to be advanced by the next Prime Minister, has allowed multinational oil and gas companies to make obscene megaprofits on the backs of hard-working people who are being crushed by soaring bills.

"Those same people will now be forced to endure additional burdens created by an interest rate increase which will devastate people, families and businesses across Northern Ireland.

“First time homebuyers will experience monthly mortgage payments worth 40% of their salary. Small businesses with commercial or personal loans will see repayments increase in line with interest rates. People planning to start a new life for themselves and their families on the other side of the pandemic have had their hopes and ambitions stifled.

“This situation demands a multilateral response from Westminster and devolved government," said the Derry MP.

Over 100,000 people living in poverty in Derry and Strabane