The Bank of England raised UK interest rates for the first time in 14 years.
It has raised interest rates nine times in a row.
At a time when many people are struggling with the cost of living, the rise will cause higher mortgage payments for some.
Banks should pass on the higher rate to customers.
The Bank of England has been trying to calm rising prices.
Inflation has increased at its fastest rate in 40 years as the cost of food and energy increases.
It is thought that raising interest rates will encourage people to borrow and spend less. The rate of inflation should be brought down by this.
The Bank said it was likely to raise interest rates next year.
It means that homeowners with variable rate mortgage could face higher costs.
People on a typical tracker mortgage will pay almost £50 more a month after the most recent rate rise.
The Bank of England must not cause the economy to slow too much.
The UK is thought to be in a recession because of soaring prices.
A recession is when a country's economy shrinks for two consecutive quarters.
Companies usually make less money and pay less. The government doesn't get as much tax to use on public services.
The Bank believed that the economy would perform better than previously thought in the final three months of the year, and that it would shrink by less than previously thought.
Millions of people are under pressure as the cost of living continues to rise.
The latest official figures show that regular pay grew in the last three months of the year. Wages fell due to inflation.
The Chancellor indicated that raising public sector pay could make the situation worse. Widespread strikes have arisen due to anger over how it has lag behind.
He said that it was vital that they stick to their plan and work with the Bank of England to return inflation to target.
The quicker we control inflation the better. Any action which risks permanently embedded high prices into our economy will only prolong the pain for everyone.
The Bank warned that it would have to raise interest rates more quickly if firms continued to raise wages.
All Rights Reserved © 2024
