The UK is facing its longest recession since records began as the Bank of England raised interest rates.
Unemployment in the UK will nearly double as the country faces a two-year slump in the economy.
It was the biggest jump in UK interest rates in 25 years.
When the UK banking system faced collapse it took borrowing costs to their highest in six years.
The cost of living has increased so much that many UK households are facing hardship.
A recession is when a country's economy shrinks for two consecutive quarters. Companies may make less money and pay less.
The Bank believes the economy entered a "challenging" downturn this summer, which will continue next year and into the first half of the next decade.
It will be the longest downturn since records began in the 1920s, according to the Bank.
The government's priority was to "grip" inflation, according to Chancellor Jeremy Hunt.
"Interest rates are rising across the world as countries manage rising prices largely driven by the Covid-19 epidemic and Putin's invasion of Ukraine."
"Restoring stability, sorting out our public finances, and getting debt falling are the most important things the British government can do right now."
The cost of living is rising at its fastest rate in 40 years, with prices increasing in the year to September.
The Bank thinks raising interest rates will make it more expensive to borrow and encourage people not to spend money.
It will have an effect on those with credit card debt and bank loans.
If interest rates continue to rise, those who have mortgage deals coming to an end could see their payments go up by thousands.
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