Interest rates increase: What this means for you and your money explained

The cost of living crisis delivered yet another nasty surprise in March, with the news that inflation had risen unexpectedly in February to 10.4%. While below the record rate of 11.1% seen in October 2022, it still means price rises are increasing so rapidly that the purchasing power of the pounds in our pockets is being eroded at an alarming rate. New research by charity the Food Foundation showing key workers are struggling to afford to eat underlines the severity of the situation. In a bid to bring inflation back to a more sustainable level, the Bank of England has increased its base rate 11 times since the start of 2022. The latest increase saw rates climb another quarter of a percentage point to 4.25% on Thursday (23 March).