The Bank of England raises interest rates from 4.25% to 4.5% - the 12th rise in a row and their highest level in almost 15 years
The increase means mortgage and loan costs will rise for many, though some will earn more on their savings
But the Bank's Governor, Andrew Bailey, says the UK is no longer expected to go into recession
He also says average energy prices are expected to drop to £2,100 by the end of the year
The Bank has been raising rates in an attempt to lower inflation - the rate at which prices are rising
High inflation, largely driven by the soaring cost of energy, has pushed prices up leaving many people struggling with the cost of living
We're now closing our live coverage of the Bank of England's interest rates rise.
The page was edited by Alexandra Fouché and Paul Gribben.
You can read our full story here.
If you want to know how the rates rise will affect you personally, you can read our explainer here.
And you can try out our inflation calculator here to see how prices are changing.
Thank you all for joining our coverage today.
It's been a busy one and here are the key points:
Finding all this economics a bit baffling - or want to dig deeper?
Tim Harford of BBC Radio 4’s More of Less has made this series of podcasts called Understand: The Economy.
They explain things we’ve been covering today - including one on interest rates and mortgage rates and one covering inflation - in 14-minute episodes.
Listen to find out why the Bank of England’s 2% inflation target is kind of like walking along the side of a cliff edge…
Faisal Islam
Economics editor
More now from Bank of England governor Andrew Bailey who has urged banks and borrowers to be “careful” with 100% mortgages, a product where there is no requirement to put down a deposit on a new home.
Earlier this week Skipton Building Society became the latest lender to offer deposit-free mortgages specifically aimed at people currently renting.
The interest rate for the product will be 5.49% which is more expensive than the current average 5-year fixed deal of 5%.
Zero deposit mortgages are seen as riskier loans and one of the contributing factors behind the 2008 financial crash.
“I think we have to watch it very carefully,” Andrew Bailey told the BBC.
“100% mortgages have to be done in well-administered and well risk-assessed circumstances”, Bailey said.
“What we have done from the financial stability side of the bank's work is to say we want a limit on what I would call very high loan-to-income mortgages and I think that will reduce the proportion of households who could have had a very bad experience with higher interest rates”, he added.
“I’m not going to say no to 100% mortgages but both lenders and borrowers have to be very careful about this”.
That's it for our questions and answers today about the rise in interest rates. Thanks to everyone who sent in questions and shared their personal experiences of how rising prices have been affecting them. Thanks also, of course, to BBC personal finance correspondent Kevin Peachey for providing plenty of really useful answers.
We're going to wrap up this live coverage shortly but you can read more here about how the interest rate rise affects you.
Jennifer on the Isle of Man and her partner renewed their mortgage two weeks ago, which she says they were "dreading".
Speaking to Radio 5 Live, she says their monthly payments have gone from £725 a month to £1,120.
"We've just had a second baby," she says. "At this stage, we're not sure how we're going to manage."
The couple also have a three-year-old child and say their childcare costs have also "skyrocketed".
"I'm going to have to go back to work earlier than I wanted to, because maternity pay is not going to cut it," Jennifer says.
Kevin Peachey
Cost of living correspondent
Peter wants to know: Why doesn’t the government insist banks increase the interest paid on savings accounts?
Ultimately, it is a commercial decision when it comes to big banks setting rates for savers. The government cannot intervene.
Banks have a variety of factors to weigh up – such as the cost to them to borrow money, which savings products to concentrate on, and whether or not they want to compete with challenger banks on rates.
What’s clear is that they are under a lot of pressure to pass on the rate rise to savers.
The Treasury Committee of MPs, in particular, has been hauling in bank bosses and writing letters demanding to know whether banks will be treating their savings customers “fairly”.
Much of the focus today has been on what the higher base rate means for mortgage holders.
In the other direction, banks have faced criticism for being sluggish about increasing the interest on savings going to their customers.
NatWest chairman Sir Howard Davies was pressed about rates for the bank's instant access saving account by Sarah Montague on BBC Radio 4’s World at One, saying he had to look "at the impact on both savers and borrowers".
"We have to balance that, we have to look at what we’re paying to depositors, which is an important point," he said.
"What we think is right is that we pay people more if they’re prepared to commit for longer because liquidity is valuable to banks."
He said his bank was also trying to keep the "mortgage market alive" which it "did at the end of last year when some other banks pulled out".
“We think we are striking the balance in a perfectly reasonable way, supporting people who are prepared to commit to saving,” he added.
Image source, Jo WilderJo Wilder rents in Cardiff and is looking to buy a property.
She currently pays £700 a month for a studio apartment as her rent increased around six months ago when interest rates rose.
Jo spoke to Radio 5 Live earlier, saying she worries that when she does get a mortgage, she won't be any better off financially.
"The way it’s going, a mortgage might rise to pretty much what I’m paying in rent," she said.
"It feels a bit daunting to be going down this road when I know that I’m not going to be better off.
"They [interest rates] have to come down at some point because we can’t live like this."
Dharshini David
Economics Correspondent
We’re not alone in seeing interest rates soar, any more that we are in seeing prices jump over the last year in the aftermath of the spike in food and energy prices prompted by Russia’s invasion of Ukraine.
In the US, the key rate set by the Federal Reserve, the central bank, was increased to a range of 5.00% - 5.25% this month.
But it's signalled that the rises may be coming to an end. Inflation there has been lower and falling. Being less reliant on imports, the US was more insulated from the spike in energy prices. But like the UK, America has seen skill shortages which pushed up prices. Inflation there remains higher than the target.
Meanwhile, the EU has been far more exposed to the energy price hike. The European Central Bank raised the main interest rate there to 3.25% last week. With inflation rates in many countries there coming down - economists’ expectations are that there are only one or two more increases to come
While exact experiences of interest rates and inflation might differ, households and businesses in all these areas are seeing the kind of borrowing costs not seen in 15 years or so.
This is a question a lot of you have been searching.
As our economics editor Faisal Islam explains in his new article, the Bank of England is keeping the door open for another rise next month.
The question of when interest rates come down is linked to the UK's overall economic performance. Faisal writes that the Bank's new forecast outlines a possible start of economic recovery this summer (an upgrade from previous forecasts).
But, in his words, inflation is expected to hang around like a bad smell well into next year. And high inflation is what prompts the Bank to hitch up interest rates - hence the possibility of a 13th successive rise next month.
Kevin Peachey
Cost of living correspondent
Paul asks: If inflation is being driven by high energy and food costs (essentials), what good will raising interest rates do when that just raises people’s mortgage costs?
The theory is that it tackles demand for non-essentials, such as holiday travel. Dampen that demand and price rises will slow.
However, the impact is clearly felt much more widely.
Not only is that on mortgages, but also on the potential for other forms of borrowing to get more expensive – such as new personal loans, car finance, credit card debt and student loans.
Michael Race
BBC Business Reporter
Small businesses have accused the Bank of England of being "out of touch" with the realities they are facing.
Martin McTague, chair of the Federation of Small Businesses, says firms will be "worried" to see rates rise again and said the latest decision risks "entrenching economic damage to small firms" by reducing their ability to invest and grow.
He highlights recent remarks made by the chief economist of the Bank of England, Huw Pill, who said a game of "pass the parcel" of workers asking for wage rises and businesses passing on higher costs was fuelling inflation.
“Getting the rate of price rises under control is vitally important for small firms, but they could be forgiven for asking if the blunt weapon of base rate increases is effective, given that they are still very much feeling the effects of higher prices at the same time," says McTague.
Kevin Peachey
Cost of living correspondent
Image source, Getty ImagesElaine says you cannot keep putting interest rates up hoping it will control what people are spending. If we want to control inflation, could the Bank of England have a word with the supermarkets massively increasing their prices to take advantage of this situation?
Supermarkets say they are operating on very fine profit margins, even though they sell a lot of produce.
They point out they need to strike a balance between their shareholders, suppliers and customers.
In the press conference after the base rate decision was announced, the Bank’s governor – Andrew Bailey – said that food price inflation would start to slow.
But his message was that the rate of price rises would not slow quite as quickly as they had previously thought.
Governor Andrew Bailey says inflation has hit food and energy costs the most.
Earlier, we heard Bank of England Governor Andrew Bailey say the Bank of England was "very sensitive" to those on lower incomes - following a "very substantial hit to national income".
His remarks come after the Bank's chief economist caused controversy recently by saying people needed to "accept" that they were poorer, otherwise prices would keep soaring.
Bailey commented on the furore today, telling the BBC: "I don’t think his choice of words was the right one to be honest and I think he would agree with me.”
Kevin Peachey
Cost of living correspondent
Steve asks: Don’t we have to get our heads around the fact that we have been living in an artificially low interest rate world?
Steve makes a point you will hear a lot from people with experience of borrowing in decades past.
Interest rates were at historic lows – and we are talking about many decades of history – for many years before the end of 2021.
A generation of homeowners have become accustomed to ultra-low interest and mortgage rates.
However, they are also a generation who have also become accustomed to high and fast-rising house prices.
Saving for a deposit was tough when house prices were going up swiftly and little return was being paid to savers.
Kevin Peachey
Cost of living correspondent
James from Norwich notes that people are spending more because of high energy and food prices. The point of raising interest rates is to reduce the amount people spend - so why does the Bank of England keep raising rates?
Lots of people are asking the same question – for entirely understandable reasons.
Why would the Bank of England raise rates, increasing the financial pain on those already suffering, knowing that the impact on prices could be limited?
One answer is that the base rate is a blunt instrument, but pretty much the sharpest the Bank has.
So, the committee has decided that a higher rate will dampen some non-essential spending, and bring down the rate of price rises (known as inflation). It may take some time.
Clearly, the impact is that borrowing gets more expensive for millions of people.
This may, or may not, be the end of the run of rate rises. It certainly isn’t the end of the debate over this policy.
Want to know more about today's interest rates rise and how it might affect you?
Our cost of living correspondent Kevin Peachey is going to be answering questions you've submitted.
Stay with us and we'll bring you the questions and answers from 14:00 BST.
Michael Race
BBC Business Reporter
The press conference at the Bank of England has now finished following several questions from reporters.
If you've recently joined us - here's a quick recap of where we are at:
Dearbail Jordan
Business reporter
A couple of weeks ago, the Bank’s chief economist Huw Pill provoked backlash when he suggested that people in the UK needed to accept that they are poorer, otherwise prices will continue to rise.
Pill said that there was a "reluctance to accept" households were worse off.
It now looks like he regrets how he expressed himself, as does Bank of England governor Andrew Bailey.
Asked about the comments by BBC News, Bailey says: “I don’t think his choice of words was the right one to be honest and I think he would agree with me.”