The Bank of England has increased base rate to 0.75pc, making the cost of borrowing more expensive.

This is the third consecutive interest rate rise and the highest it has been since March 2020, just before it was cut to a record low of 0.1pc in response to the Covid pandemic.

Finance experts were expecting to see a base rate hike today to help control rising inflation, but Rachel Springall from Moneyfacts, a Norwich-based finance firm, said that the rate rise "comes at the worst possible time for borrowers".

Already mortgage rates have been increasing and the Bank's announcement will likely see them pushed up further.

Meanwhile, the base rate hike could make lenders nervous about the economic outlook and make borrowing through credit cards and loans harder or more expensive as a result.

But with inflation expected to hit 8pc or higher in the coming months - significantly above the Bank's target of 2pc - base rates could see several more increases before the end of this year and could reach 1pc for the first time since 2009.