We're bringing our live coverage of the interest rates decision to a close now.

You can continue to follow the story and learn more about why the Bank of England changes interest rates here.

To follow how shortages of salad and other vegetables helped push food prices to a 45-year high and learn more about why prices are rising so much click here.

For more on the reasons why UK inflation is higher than other countries, read this.

With a thanks to the writers who were Beth Timmins, Michael Sheils McNamee, Anna Boyd, Thomas Mackintosh and Tom Espiner. The editors were Jennifer Meierhans and Rob Corp.

There's more live coverage on the BBC News website this afternoon:

• TikTok CEO Shou Zi Chew facing Congress grilling over app safety
• Mass protests grip France as pensions row rages

Thanks for joining us.

If you've recently joined us - here's a quick recap of where we are at:

• The Bank of England raised interest rates for an 11th consecutive time - from 4% up to 4.25%.
• It is the highest level for 14 years and was put up as a way of trying to slow rising prices
• It follows a shock jump in inflation last month which reached 10.4% in the year to February, after the figure was pushed up by salad and vegetable shortages
• The interest rate rise will see the cost of variable or tracker mortgages go up but the rate of return for savers could improve
• The US central bank also raised interest rates on Wednesday by 0.25%, amid lingering worries over the global financial system after two US banks failed

All eyes will now be on the Bank's next meeting in May where new quarterly forecasts for the UK economy and inflation could underpin a pause in rate rises.

Image source, Reuters

Bank of England governor Andrew Bailey, has said he is "much more hopeful" that the UK can avoid a recession.

Mr Bailey was speaking after the Bank decided to raise rates for an 11th consecutive meeting.

The governor said that back in February the Bank was "a bit on a knife edge as to whether there would be a recession" but now was a "bit more optimistic" about the outlook.

He warned however that the UK economy is "not off to the races".

Mr Bailey refused to say whether he thought UK interest rates has reached a peak.

"We don’t know if it is going to be the peak, but what we can tell you is that we’ve seen signs of inflation really peaking now, but of course it is far too high," he said.

The governor said he did not think the current turbulence in global banking was likely to be a re-run of the 2008 financial crisis.

"I think we've got a banking system that is safe and sound and of course, it's one that people can rely on.

"That's the thing - we must have this banking system that people can rely on. Now, I'm optimistic on that. I do think that banks are in a strong position in this country. People shouldn't worry."

Just to put things in context - this is the 11th consecutive increase in UK rates. The graph below shows how things really took off in 2021-22 when inflation began taking hold.

Image source, .

And here's what the latest interest rate rise looks like compared with other countries like the US, Canada and the Eurozone.

Image source, .

Let's go back to Radio 4's The World at One where economist David Blanchflower has been giving his views on today's announcement,.

Blanchflower, you may remember, was one of the Bank of England's policymakers during the 2008 financial crisis, and has been calling for interest rates to be cut.

He says the Bank putting rates up again is a mistake.

"Over the last two weeks, the shenanigans that have gone on in global financial markets is basically equivalent to a 2% rise in interest rates," he tells the programme.

"That's going to clamp down on the economy hugely."

He adds there's a "huge incoherence" in the hike.

The Bank's own February forecasts of three years of no economic growth, then rates inflation dropping below its 2% target by 2024 and the recent market turmoil shows the Bank should be cutting rates, he says.

Anna Leach, deputy chief economist at the CBI business group, says the interest rate rise to 4.25% is a "tricky one for the MPC ( Monetary Policy Committee)".

Leach says it was done "against the backdrop of recent global financial market turbulence, a surprise rise in domestic inflation and a Budget which provided more support for the economy".

An increase in interest rates will have an immediate impact for some people with mortgages - particularly those on variable or tracker rates.

Neil Sutton's monthly mortgage payments were £255 before they started going up in January 2022. They’ve just had a letter to say they’ll rise to £465 from next month. And today's rise means they'll be going up even further after that.

Mr Sutton's 20 year mortgage comes to an end next March, when he says he won't be able to afford to remortgage.

"So I guess the bottom line is that we're going to have to move."

Let's look beyond our shores, because there remains persistent concerns about the state of the global banking sector - following the recent collapse of two US banks and the emergency takeover of Credit Suisse by UBS in Switzerland.

Susannah Streeter, head of money and markets at financial firm Hargreaves Lansdown, says it is "clear that a banking curveball has been lobbed into the Bank of England's already tricky juggling act".

"But for now, the eye of policymakers is still firmly trained on catching inflation and bringing it under control," she tells BBC Radio 4's The World at One.

However, she adds that "it wasn't a unanimous decision to hike rates" at the Bank of England.

Thomas Mackintosh
Live reporter

I've been speaking to Richard Bagnall who lives in Cambridge and believes the Bank of England has made the wrong decision to hike interest rates.

He told me his understanding is the rise is to curb spending, but feels people have already cut back enough due to the high cost of living.

Richard says: "If anything they should be reducing it to make life easier for people. Personally the lower the better."

The 61-year-old says he, like many, is facing the challenge of renegotiating a mortgage.

"The last time I spoke to someone it was looking like an eyewatering £400 extra on top of what I was already paying. I suspect it will be more now."

"It is going to hit me hard, but there must be people in the same situation.

"Some people are already tied into their homes and can't do anything in such a short space of time.

The Money Advice Trust runs the National Debtline and the Business Debtline. Its chief executive Joanna Elson says today's increase will be a "major concern" for mortgage holders.

"Especially for those on variable rates or coming to the end of their contracts," she says.

"And for many, affording higher repayments will be even harder, as the sustained pressure of rising prices continues to be felt."

“Renters are also likely to be hit, as landlords pass rate rises on to tenants, leaving many peoples’ budgets with no stretch left."

She advises anyone struggling with debt to contact one of the charity's helplines.

With interest rates going up again, many of you will be worried about even more of a squeeze on your household budget.

Throughout the cost of living crisis, the BBC has been looking at how people up and down the UK have been finding ways to cope. We've also been providing tips from experts for navigating through what's been an extremely difficult period for many of us.

Here are some ways you can find help:

• Anyone with a mortgage can use this calculator to see what the difference in their monthly payment is likely to be under a higher interest rate (If you're on a fixed mortgage, your rate won't change until the end of your fixed period.)
• Worried about missing a repayment? There is advice here on how to engage with your lender, and what responsibilities they have
• Prices are rising - but do not affect everyone in the same way. Use this calculator to find out your own personal inflation rate
• Want some help tightening up your budget? Here is some savings advice tailored to your personal circumstances
• And here are five hacks on how to save money on the food shop

The pound has strengthened on the currency markets following the Bank's midday announcement.

Sterling is trading 0.5% higher against the US currency at $1.22 and is also up against the euro by 0.25% to €1.132.

However, London's FTSE 100 stock index stayed lower after the announcement with bank stocks 0.8% down.

Today's interest rate hike could be the lastpublished at 12:55 Greenwich Mean Time 23 March 2023

12:55 GMT 23 March 2023

Faisal Islam
Economics editor

The signs are that the Bank of England is coming in to land on rate rises, and today's quarter-point hike could be the last. The pace of rises is slowing, from half a percentage point previously.

Inflation is now going to fall faster than expected, as a result of Budget measures. The Bank repeated language that further rises would be required “if there were evidence” of more inflationary pressures.

The Bank’s’ discussions suggested that some of that pressure, for example from wage growth, was declining even after yesterdays shock inflation number. The next meeting in May is now a key point, where new quarterly forecasts for the economy and inflation could underpin a pause in rate rises.

Image source, PA Media

While the British economy is better than feared, with a predicted recession now anticipated to be swerved, there are concerns about the impact of global financial fragility. The UK remains resilient. But that is another cloud weighing over the Bank’s decisions, with some memories of the quickly reversed rises made by the Bank, even after the credit crunch started in 2007.

Absent that new cloud however, there is some good news about the UK economy here. The consumer seems more resilient to what was an extraordinary energy shock. Unemployment is not now expected to rise. The economy may still be flat, but given the size of the energy shock, it could have been much worse.

Image source, Getty Images

Reacting to the Bank of England's latest rate hike, Chancellor Jeremy Hunt says rising prices are "strangling growth and eroding family budgets, the sooner we grip inflation the better for everyone".

The government supports the decision, he says - the Bank is independent although they work closely together.

Mr Hunt adds the government will play its part "by being responsible with the public finances, alongside providing cost of living support worth an average of £3,300 per household over this year and next".

Michael Race
BBC Business Reporter, at the Bank of England

The lock-in at the Bank of England was packed with journalists from various broadcasters and newspapers.

There's always lots of interest (no pun intended) in rate decisions but today's is being followed closely after a shock rise in the rate of inflation in the UK for last month was revealed yesterday.

Now most journalists are filing their copy and the TV broadcasters are telling their audiences what the latest decision means for you.

Reacting to the decision, Danni Hewson, from investment company AJ Bell, told BBC News that rates had gone up again because prices "had not cooled" in the way the Bank had hoped.

The function of raising the interest rate again would take some of the cash out of the economy and mean less spending which also means prices "tend to come down," she explained.

The Bank wanted to avoid inflation becoming "sticky", she said.

Savers she said, would benefit from the rate rise but with the caveat that the money would lose value.

People on a tracker or variable rate mortgage will automatically see that get passed on. For example if you have £250,000 of borrowing you will pay an extra £35 a month.

She said that rents are also likely to increase as many landlords will see their mortgage repayments go up.

Michael Race
BBC Business Reporter, at the Bank of England

The Bank of England voted to increase its benchmark interest rate to a fresh 14-year high after inflation “unexpectedly” increased last month - but it said price rises remained “likely to fall sharply over the rest of the year”.

The monetary policy committee voted in favour the latest rise by a majority of seven to two, with the Bank saying “cost and price pressures have remained elevated”.

It means that mortgage costs for some homeowners will rise and some savers will be able to get better returns.

The Bank warned the extent to which inflation eases in the coming months would depend on the “evolution of the economy”, including the impact of its interest rate hikes so far.

Image source, Reuters

Michael Race
BBC Business Reporter, at the Bank of England

The Bank of England says it is no longer predicting that the UK is heading into an immediate recession, which is in line with the view of the Office for Budget Responsibility, the government’s official forecaster.

The Bank says the UK economy was expected to grow “slightly” in the coming months, rather than shrinking as previously forecast.

It expects inflation to fall in the coming months, despite February’s shock rise in the cost of living.

The Bank went as far to say that the contribution of energy prices to overall inflation would “turn negative” by the end of this year.

The high price of energy has been the main driver of inflation over the past year, with gas and oil prices surging in the aftermath of Russia’s invasion of Ukraine.

Michael Race
BBC Business Reporter, at the Bank of England

Image source, Getty Images

Interest rates have been increased to 4.25% from 4% by the UK's central bank in an attempt to slow rising prices.

The Bank of England's decision to lift rates for the 11th time in a row comes after figures showed the cost of living rising by more than expected.

Inflation jumped to 10.4% in the year to February, despite predictions it would fall.

The rate rise comes amid lingering worries over the global financial system after a number of bank failures.

The Bank has been steadily putting up interest rates in a bid to tackle the soaring cost of living.

Inflation, which is the rate at which prices rise, remains close to its highest level for 40 years - more than five times higher than the Bank's target rate.

Kevin Peachey
Cost of living correspondent

When interest rates rise, more than 1.4 million people on tracker and variable rate deals usually see an immediate increase in their monthly payments.

An increase in the Bank rate from 4% to 4.25% will mean those on a typical tracker mortgage should pay about £24 more a month. Those on standard variable rate mortgages would face a £15 jump.

This would come on top of increases following the previous recent rate rises. Compared with pre-December 2021, average tracker mortgage customers would be paying about £394 more a month, and variable mortgage holders about £251 more.