Interest rates have been increased to 4.25% from 4% by the UK’s central bank in an attempt to slow rising prices.
The Bank of England’s decision to lift rates for the 11th time in a row comes after figures showed the cost of living rising by more than expected.
Inflation jumped to 10.4% in the year to February, despite predictions it would fall.
The rate rise comes amid lingering worries over the global financial system after two US banks failed.
The Bank has been steadily putting up interest rates in an attempt to tackle the soaring cost of living.
Inflation, which is the rate at which prices rise, remains close to its highest level for 40 years – more than five times what it should be.
The Bank voted to increase its benchmark rate to a fresh 14-year high following inflation increasing “unexpectedly”, but it said price rises remained “likely to fall sharply over the rest of the year”.
Its rate-setting Monetary Policy Committee voted in favour the latest rise, with a majority of seven to two, with the Bank saying “cost and price pressures have remained elevated”.
It means that mortgage costs for some homeowners will rise and some savers will be able to access better returns.
