PRICE BITE

Mortgages down in interest rate cut but food inflation to hike bills

- BY GRAHAM HISCOTT Head of Business

MORTGAGE costs fell yesterday as the interest rate was cut to 4% but families' annual food bills may rise by £290 with inflation.

The Bank of England reduced borrowing costs from 4.25% to its lowest level for more than two years.

The Bank's fifth cut since August will boost more than a million people with variable rate mortgages, and another 900,000 whose cheap deals will expire by December.

A typical £250,000 mortgage would drop by £41 a month while a £350,000 loan would be £57 a month cheaper.

But millions of savers risk lower returns.