Many homeowners across the country will be impacted by today’s announced rise in interest rates (Picture: Getty Images)

The Bank of England‘s announcement of the biggest interest rate rise in more than 30 years has sent shockwaves up and down the country.

Homeowners will face crippling mortgage costs, with young people to be hit hardest.

The Bank’s base rate will rise to the highest level since 2008 – from 2.25% to 3% – and there have been warnings it could rise even further next year.

The development is expected to pile on around £3,000 per year on to bills for those households which are set to renew their mortgages.

Borrowers with a £200,000 standard variable mortgage could see their repayments rise by more than £1,000 a year.

For some experts, today’s announcement has harked back to economic earthquakes of the 1980s.

Simon Lambert, editor of This Is Money, said: ‘Research from BuiltPlace that adjusted for housing affordability has shown that base rate at 6% today would be the equivalent of the double-digit rates of the late 1980s and early 1990s.

‘The sliver of good news for today’s homeowners is that both the Bank of England and markets now forecast that base rate will not rise quite as high as previously expected, peaking below 5% rather than above it.

Governor of the Bank of England Andrew Bailey issued a dire warning to the nation (Picture: PA)

‘Meanwhile, mortgage rates spiked so much after the mini-Budget that they ran far ahead of base rate expectations and have actually started to come down a bit.’

Today’s announcement is worrying news for first-time buyers looking to get onto the property ladder.

Mr Lambert explained: ‘Today’s base rate rise will particularly worry the younger generation of homeowners who have had to take large mortgages to get on the ladder in this era of very high house prices.

‘House prices are more expensive compared to average wages than they have ever been and this has led to borrowers taking on considerably bigger mortgages compared to their salaries than their parents’ generation did – enabled by record low interest rates.

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‘Now that interest rates have started to rise much faster than anyone expected, mortgage rates have jumped substantially and this is having a hefty impact on people’s finances.’

Today, the Bank of England governor Andrew Bailey warned it was a ‘tough road ahead’ for the UK and households.

He went on to acknowledge the fact eight rate rises since last December are ‘big changes and they have a real impact on peoples’ lives’.

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For some experts, today’s announcement has harked back to economic earthquakes of the 1980s.