Nationwide has announced it is raising interest rates across its savings accounts, including hiking one to 5%.
The decision comes after a Bank of England policymaker said interest rates may have to rise to 2% or higher in the next year to rein in rocketing inflation. Outgoing Monetary Policy Committee (MPC) member Michael Saunders - who has been recently outvoted in calling for a bigger hike in rates - said increases "still have some way to go" in order to get inflation under control.
In a speech at the Resolution Foundation think tank, he warned that, despite signs of a slowdown in the wider economy amid the cost-of-living crisis, the risks of not raising rates steeply and quickly outweighed those of being too cautious.
