Interest rates are to rise to their highest rate in six years, it was announced this lunchtime, with an increase of 0.25 per cent taking the rate to 5.5 per cent.

The Bank of England's Monetary Policy Committee (MPC) hiked its base rate from 5.25 per cent to 5.5 per cent, the fourth quarter point rise since August.

The move had been widely expected after inflation hit 3.1 per cent in March, forcing the Bank's Governor to write a letter to the Chancellor for the first time to explain why.

However, analysts predicted homeowners could be worst hit, with the increase adding an average £16 a month onto a typical £100,000 mortgage.

Quorn owner Premier Foods has today reported its sales in April had been hit by the unusually hot weather, but said its growth forecasts for the year remained unchanged.

The business - which makes the meat substitute Quorn at its sites in Billingham, Teesside, and Stokesley, North Yorkshire - said it had been a tough month, with its recently-acquired brands like Bisto gravy and Paxo stuffing amongst the worst hit.

Barclays is to cut over 1,000 staff over the next three years in a move aimed at improving efficiency - but the North-East will be safeguarded from the cuts.

Instead, all redundancies will be from the bank's offices in Poole, Dorset, which employs 1,900 staff.