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Bank of England sets biggest hike in 33 years

The Bank of England raises interest rates by 0.75 percentage points to 3% – the biggest hike since 1989.

It also forecasts that the UK is facing a “very challenging” two-year recession – which would be the longest on record.

The higher interest rate will be welcomed by savers, but the rise will have a knock-on effect on for those with mortgages, credit card debt and bank loans.

Interest rates have been rising since December in an effort to curb soaring prices – inflation is at its highest for 40 years.

Today’s rise follows economic turmoil under Liz Truss’s government; though things have calmed slightly since Rishi Sunak took over.

Sunak has promised a new plan to repair the nation’s finances later this month but tax rises and spending cuts are expected.

Writing by Omotola Oguneye