Mortgages

If you own your home, chances are you've got a mortgage.

If you're on a fixed rate, that won't budge whatever happens to interest rates today.

But if you're on a tracker or standard variable rate - and interest rates rise - your monthly payments will also go up.

Credit cards and loans

Even if you don't have a mortgage, changes in interest rates could still affect you.

Bank of England interest rates also influence the interest charged on things like credit cards, bank loans and car loans.

Savings

The Bank's decisions also affect the interest rates people earn on their savings.

Individual banks usually pass on any interest rate rises - giving savers a higher return on their money.

But for people putting money away, interest rates are not keeping up with rising prices.

• What are interest rates and how high could they go?

Interest rates are decided by a team of nine economists, the Bank of England's Monetary Policy Committee.

They meet eight times a year - roughly once every six weeks - to look at how the economy is performing.

Their latest decision will be published at 12:00 BST today.

Inflation is the increase in the price of something over time. For example, if a loaf of bread costs £1 one year and £1.09 the next year, then that's an annual inflation rate of 9% - which is where we are now.

So why are prices rising so fast?

• Energy bills are the biggest contributor to inflation at present, as oil and gas prices remain at elevated levels in part due to the Ukraine war
• Fuel prices are also surging - the cost to fill a family car now stands at about £103 for petrol, and £106 for diesel
• Food prices are also rising globally, and this is also connected to the Ukraine war. Both Ukraine and Russia are major global grain producers and so Russia's invasion of Ukraine is pushing up grain prices as countries around the world scramble for the produce
• The rate of VAT - the tax paid when buying goods and services - has gone up for some businesses. The government reduced VAT for hospitality and tourism firms during the pandemic, but on 1 April it returned to the standard 20% rate
• The costs of raw materials, household goods, furniture and restaurants and hotels are also going up

Here's our full explainer about why the cost of living in the UK is currently going up.

Image source, Getty Images

Prices are rising by 9% in the UK - the highest for 40 years.

But most people's wages aren't keeping up.

The Bank of England has warned inflation might reach 10% within months.

Its usual tactic to bring down inflation is to raise interest rates - good for savers, bad for borrowers.

The idea is that if borrowing becomes more expensive, people have less money to spend because they are paying more on mortgages and loans and will buy fewer things - meaning prices should stop rising as fast.

Last month the Bank raised interest rates from 0.75% to 1% - their highest level for 13 years.

Today could see a further increase to 1.25%.

Hello and thanks for joining us.

The Bank of England is poised to announce at 12:00 BST whether it's raising interest rates - and we'll be here to guide you through.

Stay with us for the latest updates and to find out what it means for you and your finances.