UK interest rates have risen to 3% – their highest level in 14 years – by the Bank of England.
They rise from 0.75%, marking their largest single day increase since Black Wednesday in 1992.
This comes just a day after the United States Federal Reserve also increased interest rates.
The rise is likely to cause significant anxiety for homeowners, as it will increase the cost of mortgages.
Interest rates have been seen as the major tool to control inflation – which topped 11% in recent weeks.
However, with inflation being driven by increased costs due to the war in Ukraine, rather than increased consumer spending, there is scepticism over whether the increase will help to tackle inflation.
The Bank of England has warned that the UK economy is already in recession and that it could be a protracted crisis that hits the economy for many years.
