The Bank of England has upped its interest rates by 0.5% – the most significant rise seen since 2008.
The base rate has been hiked from 1.75% to 2.25%, a speedy increase after it was last raised in August of this year.
It comes as the Bank, which is the central point for finance in the UK, attempts to tackle inflation amid the cost of living crisis.
The Monetary Policy Committee (MPC) said: “The Committee will, as always, consider and decide the appropriate level of Bank Rate at each meeting.
“The scale, pace and timing of any further changes in Bank Rate will reflect the Committee’s assessment of the economic outlook and inflationary pressures.
“Should the outlook suggest more persistent inflationary pressures, including from stronger demand, the Committee will respond forcefully, as necessary.”
Since August, wholesale gas prices have been highly volatile and there have been large moves in the financial markets.
Government bond yields have seen a sharp increase globally, meanwhile, the Sterling has depreciated over recent months.
Millions of people across the UK are facing one of the worst-ever cost of living crises in history, with the price of food, electricity, water and gas all soaring.
Last week it was reported more than 140 different value range grocery items got more expensive at UK supermarkets in August – the highest number of rises to date.
For more information on the cost of living crisis, visit National World.