The Bank of England has increased its base interest rate to the highest level in 13 years in an attempt to tackle inflation. The rate has gone from 0.75% to 1% - a figure not seen since early 2009.
The bank - whose decisions influence the interest rates charged on debts and loans across the UK, along with those on savings - has also forecast that inflation is set to rise from the current 7% to above 10% in the autumn. Members of the Monetary Policy Committee (MPC) have already raised rates at each of their past three meetings to try to rein in inflation, which hit its 30-year high of 7% in March.
Fears of a UK recession are also now increasing, as the economy only expanded by 0.1% in February this year, on top of the biggest fall of living standards since the 1950s, the Mirror reports. Bank of England Governor Andrew Bailey recently warned that the institution was “walking a very tight line” between tackling inflation and avoiding a recession.
