HOUSEHOLDERS face a double whammy with higher unemployment and soaring inflation making food and other goods far more expensive next year.

In another blow to households feeling the post-Brexit vote pinch, the Bank of England panel who set interest rates have scrapped plans for another cut.

The gloomy forecast came in the latest minutes of the Monetary Policy Committee (MPC) at which rates were kept at a record low of 0.25 per cent, having been slashed from 0.5 per cent in the wake of June’s referendum.

Members are now predicting that inflation will reach 2.7 per cent next year, up from the current rate of one per cent as price rises hit food, fuel and other commodities following the pound’s fall in value.

However, economic growth forecasts are up to 1.4 per cent from 0.8 per cent, but cut expectations for 2018 to 1.5 per cent from 1.8 per cent as the delayed effects of the Brexit decision begin to be felt.

Bank governor Mark Carney, who announced this week that he is to quit the post in the middle of 2019, admitted the growth had been “materially better” than the Bank had expected in August.

This was the reason that there will be no further rate cuts this year.

“In light of the developments of the past three months, all MPC members agreed that the guidance it had issued following its August meeting regarding the likelihood of a further rate cut in bank rate had expired,” the MPC minutes said.

There was better-than-expected growth of 0.5 per cent in the third quarter, with the Bank also now pencilling in fairly steady expansion of 0.4 per cent in the final three months of 2016 – citing stronger consumption following the Brexit vote.

But the Bank slashed its forecast for growth in 2018 to 1.5per cent from 1.8 per cent and gave a gloomy outlook for households, with higher unemployment and soaring inflation set to knock their spending power.

Meanwhile, if as predicted inflation reaches 2.7 per cent next year, it would be the highest overshoot of the bank’s two per cent target ever, amid a further collapse in the pound.

However, the Bank said it would allow inflation to run above-target, and that attempts to offset the effects through a rate hike would be “excessively costly” to the economy, though there were “limits” to which the MPC would tolerate a rise in consumer prices.

Financial markets are now predicting the Bank will hold interest rates steady through to the end of 2019, when they expect the MPC to vote for an increase.

Mr Carney played down the impact that the growth and inflation revisions would have on the Bank’s credibility, and said when “we will end up in relatively the same place with the economy” in three years time when accounting for the longer-term dip in growth.

The governor stressed the Bank had full backing from the Government despite recent criticism from Theresa May who claimed easing efforts were disproportionately hurting savers while benefiting the asset-rich.

“We don’t feel under any pressure from the Government and certainty none from the Prime Minister.

“The Prime Minister fully supports, and the Government fully supports, the monetary policy framework we have in place.”

It came amid criticism that Mr Carney went too far in warning of the economic dangers of leaving the EU in order to bolster Remain during the referendum campaign.

Mr Carney, who is expected to return to Canada after 2019, has come under fire for his tactics from Mrs May and Tory MPs.