The Bank of England has announced the biggest rate hike in 27 years as it struggles to stem rising prices.
The rise from 1.25% to 1.75% comes as inflation continues to rise due to rising energy, fuel and food prices.
It’s the sixth consecutive year the bank has raised borrowing costs to encourage people to borrow less and spend less.
Inflation, the rate at which prices are rising, is already at 9.4%, the highest level in 40 years, and is expected to rise further.
Raising interest rates raises the cost of borrowing and is a way to control rising prices — or inflation — as it discourages people from spending.
It can also encourage you to save more.
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