Your live page writers were Emily McGarvey, Jack Burgess, Catherine Evans, Oliver Slow, Victoria Lindrea, Aoife Walsh and Adam Durbin.

The page was edited by Andrew Humphrey, Shanaz Musafer and Chris Giles.

We'll be closing today's live page on the Bank of England interest rate hike shortly.

But before we go here are the key headlines of the day:

• The Bank of England (BoE) has hiked interest rates from 1.25% to 1.75% - the biggest rise in 27 years - as it battles to curb rising prices of energy, food and other commodities
• The accompanying increase in mortgage and other loan interest payments will mean growing pressure on millions of people already struggling with the cost of living - although it should also improve returns on savings

• The bank's governor, Andrew Bailey, blamed Russia for the high energy prices which are pushing up inflation - the rate at which prices rise
• The BoE has also projected that inflation, currently running at 9.4%, is expected to rise even further this year - peaking at over 13%
• The UK is also forecast to fall into recession in the last three months of this year (a period when the economy is shrinking), which the BoE believes could continue throughout 2023

More now from the Governor of the Bank of England, Andrew Bailey, who tells the BBC that the UK has been hit by a severe shock thanks to soaring energy prices - which he blames on Russia.

He says the increase in gas prices since May has had "a very big impact.. that is passing through directly into inflation.

"It will have an effect on the economy, and, yes, we are forecasting a recession," he adds.

"The really blunt message I have to give, is if that does become more embedded and the problem gets worse, we will have high inflation for longer and the Bank of England will have to raise rates even higher," the governor concludes.

Labour has urged the government to scrap tax breaks on oil and gas companies in order to provide more help to the public with rising bills.

Shadow Treasury minister Pat McFadden says the Bank of England's forecasts show "how hard this crisis is hitting families".

He adds that it also demonstrates "how much is left to come" as the situation worsens and "how vulnerable 12 years of economic mismanagement by the Conservatives has left us".

Image source, Tom Harrison

A rise in interest rates isn't bad news for everyone.

Edmund Wood is saving to buy a home close to London, so hopes a rate rise will help his deposit grow more quickly.

"An increase in interest rates is good for me," he says.

"I've been worried about rising property prices - they have climbed every month for the last 12 months in a row.

"That wouldn't be good if I was ready to buy now, but in two years when I've saved up during a period of increasing interest rates, hopefully house prices will fall again, which will leave me in a better position to buy.

"Also hopefully by then interest rates will have stabilised somewhat, meaning I'll be able to get a stable interest rate on a mortgage."

The Bank of England "left it far too late" to raise interests rates in order to curb inflation, an expert who specialises in monetary policy has told BBC News.

Patrick Reid, from the University of Cambridge, draws a comparison between the bank's current interest rate of 1.75% to the US Federal Reserve's decision last month to raise rates by three quarters of a percentage point to a range of 2.25% to 2.5%.

He says if the BoE had decided to raise interest rates more and earlier then "maybe we wouldn't have got into this stagflationary environment".

Stagflation is the term used to describe the damaging combination of a stagnating economy and high inflation.

Image source, Andy Rain/EPA

Economists have warned that the Bank of England could be forced to increase rates a further half point as early as next month, bringing the tariff to 2.25%. James Smith, developed markets economist at ING, said: “The fact that the Bank reiterated its willingness to act ‘forcefully’ to curb inflation, we think there’s a strong possibility of another 50 basis point hike in September, particularly if that’s what both the Fed [in the US] and European Central Bank end up doing too.”

He added that the fact the Bank is increasing the pace of rate hikes, while also forecasting a recession, demonstrates how worried it is that worker shortages and supply issues could keep inflation high, even as the economy weakens. "The Bank will want to see signs that skill shortages are easing and that wage pressures are showing signs of abating" before stemming rate hikes, he suggested.

Bank of England Governor Andrew Bailey said "all options" are on the table for next month, although he stressed that policy is "not on a pre-set path".

An economist has warned the decision to increase rates will not help with the cost of living crisis and could even "exacerbate the risk of recession".

Miatta Fahnbulleh, chief executive of the New Economics Foundation, tells BBC News that "people who have already been squeezed will be hit" by the Bank of England's decision.

She also notes that millions of people are already "having to borrow to get by" as inflation drives prices higher.

Image source, Getty Images

The Governor of the Bank of England has been speaking to the BBC, explaining the decision to raise interest rates.

Andrew Bailey said that interest rates needed to rise in order to control rising inflation, and despite his own predictions of a lengthy recession starting later this year.

Mr Bailey said that Russia’s invasion was the cause for the big increases in energy prices and that the Bank now predicted domestic energy bills on average to rise up to £3,500 this October.

He said that the Bank’s concern “is to ensure that this very big shock that’s going to hit inflation, that’s going to hit people this winter doesn’t then get embedded in the system.”

The Bank also revised its inflation forecast – it now says inflation will hit 13%, its highest level for 42 years. Mr Bailey said “I’m afraid if that does become embedded, the problem gets worse.

"We will have high inflation for longer and the Bank of England will have to raise interest rates even higher than we otherwise would do.”

The Bank of England has warned inflation could rise above 13% later this year.

This is why the Bank's Monetary Policy Committee has overwhelmingly voted to raise interest rates from 1.25% to 1.75% - the biggest rise in 27 years.

Although it's a big jump, interest rates are still currently at historically low levels.

Image source, .

Image source, bbc

The Bank of England is predicting that the UK will fall into recession at the end of this year.

But why does this matter?

For most people, economic growth is good.

It usually means there are more jobs, and companies are more profitable and can pay employees and shareholders more.

A growing economy also gives the government more money in taxes. So it can cut taxes, or spend more on benefits, public services and government workers' wages.

When the economy shrinks, all these things go into reverse.

How could a recession affect you?

Some people may lose their jobs, or find it harder to get promotions, or a pay rise.

Graduates and school leavers could find a first job harder to get.

However, the pain of a recession is typically not felt equally across society, and inequality can increase.

For instance, many UK homeowners who kept their jobs during the last recession did OK. Mortgage interest payments for many fell considerably, leaving them with more spending money.

Others, such as benefit recipients or public sector workers, did less well.

Read more here.

Simon Read
Personal Finance Reporter

Image source, Getty Images

Santander is one of the first big banks to publish its revised interest rates and, as usual, savers won't benefit from the full 0.5% increase.

The bank will raise rates across some of its saver accounts and in-credit current accounts by 0.25%. For example its Junior ISA rate will increase from 1% to 1.25% from 2 September.

Its current accounts that pay interest on credit balances will increase from 0.75% to 1% on 11 August.

There's one exception where the full 0.5% rate will be applied: the Help to Buy ISA will increase from 0.75% to 1.25% from 2 September.

Tracker and variable mortgage rates will climb 0.5% from 1 September.

I'd expect other high street banks to introduce similar changes at similar times.

The chief economist of a poverty charity has called today's recession forecast "frightening".

Rebecca McDonald, of the Joseph Rowntree Foundation, told the BBC the news was worrying for many people, adding the situation was "incredibly dire".

"We know that by May this year over seven million low-income households had already had to go without an essential, so that means skipping a meal, skipping a shower, not being able to heat their home or heat their meal."

McDonald added a million people also had to go into extra debt to afford an essential meal.

Today's news is a "call to action" for whoever is the next prime minister - and for the existing chancellor, she says.

The Bank of England expects the economy to shrink in the final three months of this year and keep shrinking until the end of 2023, after it raised interest rates from 1.25% to 1.75%.

This would make it the longest downturn since the 2008 financial crisis.

The Bank blamed the slump largely on rising gas prices following Russia's invasion of Ukraine, warning a typical energy bill will hit £3,500 in October.

Image source, Yui Mok/PA Wire

Bank of England Governor Andrew Bailey avoided getting drawn into commenting on Tory leadership candidate Liz Truss's plans for immediate tax cuts.

Speaking at his earlier news conference he said it's "not for the Bank of England to get involved" in the Conservative Party leadership election.

Mr Bailey said he looks forward "to working with whoever the next prime minister is" but also saids at this stage he would not comment "on what might or might not happen".

Responding to the Bank of England's interest rate decision, Tory leadership hopeful Liz Truss has said she would enact an emergency Budget should she become the next prime minister.

She says this would "kickstart" her plan to get the economy growing and "offer immediate help to people struggling with their bills".

The foreign secretary says her plan is partly based on enacting "supply side reforms" - an economic theory that argues growing the supply of goods to a country leads to economic growth and often takes the form of lowering taxes, lowering borrowing rates (which the Bank of England has just raised), as well as deregulating industries.

She denies her proposed tax cuts would be "inflationary", an attack levelled at her by her rival and former Chancellor Rishi Sunak.

Rishi Sunak has said "getting inflation under control as quickly as possible" is one of the "most urgent challenges" the UK faces.

Following the move by the Bank of England, the former chancellor and Tory leadership hopeful says it is "imperative that any future government grips inflation, not exacerbates it".

He adds he would "prioritise gripping inflation, growing the economy and then cutting taxes" if he becomes the next prime minister

If you're just joining us or want to catch up on what's been going on, here's what you need to know about the interest rates rise:

• The Bank of England's (BoE) Monetary Policy Committee has announced interest rates are rising from 1.25% to 1.75%
• Interest rates are now at their highest level since December 2008 after the biggest single rise since 1995
• The interest rate rise makes mortgages and loans more expensive, but it may benefit savers
• The BoE has warned that inflation could climb above 13% later this year and now predicts the UK will fall into recession in the last three months of this year
• Eight of the nine members of the BoE's Monetary Policy Committee voted in favour of the rise to 1.75%
• The BoE says it put up interest rates to "help return inflation to our 2% target" and says it knows the cost of living squeeze is difficult for many people

Image source, Louise Parker

Louise Parker and her husband have been saving to move home in Brighton since 2020, but they're having a major rethink.

"We've had to substantially reconsider the amount of money we can borrow, says Louise.

They'd been hoping to move to a bigger house so they could start a family.

But now they can only afford smaller houses, Louise says it's "making us wonder whether we should bother moving at all".

"Our options are either to stay put where we are or move to something about £200,000 cheaper than we had hoped."

And now they have the added question of how long to fix their rate if they move.

"We don't want to be stung after two years if rates have gone up even more, or have to downsize because we can no longer afford the repayments.

"It's just such an adjustment to have to think about interest rates. It's a new hurdle in the mix."

Chancellor Nadhim Zahawi has responded to the Bank of England's announcement by saying he is "confident" the UK can overcome the "global challenges" of rising inflation and recession predictions.

Acknowledging that the forecasts will be "concerning for many people", Mr Zahawi says addressing the cost of living is a "top priority" for the government.

He says the government has announced £37bn in support to help people with rising bills and prices, including "direct payments of £1,200 to the most vulnerable families and a £400 discount on energy bills for everyone".