We are about to bring our live coverage of the Bank of England's interest rate decision to a close.

Thanks for joining us.

Here's a round up of what happened today:

• The Bank of England announced it would increase interest rates by 0.75 percentage points to 3% - the biggest rise since 1989
• The Bank also warned the UK is facing its longest recession since records began, saying the county would face a "very challenging" two-year slump with unemployment nearly doubling by 2025
• By raising rates, the Bank is trying to bring down soaring inflation as the cost of living rises at its fastest rate in 40 years
• But the rise means people coming off fixed-rate deals could see their interest payments increase by around £3,000 a year if they need to take out a loan that is 3.5 percentage points higher
• Chancellor Jeremy Hunt acknowledged the difficulties facing homeowners and businesses, but pledged to get the economy under control and "deliver lower mortgage rates, more jobs and long-term growth"
• Shadow chancellor Rachel Reeves said families could not withstand such high rate rises "when we've got rising food prices, rising energy bills and now higher mortgage rates as well"

This coverage was brought to you by Anna Boyd, Adam Durbin, Lora Jones, Thomas Mackintosh and Gem O'Reilly, and edited by Andrew Humphrey and Alex Kleiderman.

Labour leader Sir Keir Starmer has been giving his reaction to the interest rate decision.

Speaking to Martin Geissler for BBC Scotland's The Sunday Show, he says many families will be "really worried".

"This means hundreds of pounds on their mortgages, much higher bills they've got to pay, on top of the struggles they've got at the moment."

Sir Keir acknowledges global events, including the conflict in Ukraine, were also having an impact on the economy, but added: "We're more exposed in the UK than other countries and that's because for 12 years there's been a failure to grow the economy as we needed it."

Kevin Peachey
Cost of living correspondent

Interest rates have risen sharply as the Bank of England continues to use its powers to tackle soaring prices.

The Bank has increased its benchmark rate from 2.25% to 3%.

That is the eighth consecutive increase since December, pushing the rate to its highest level for 14 years.

It also marks the biggest single increase since 1989, and could have a big impact on the cost of living and people's finances.

Read more here

Image source, Reuters

Pubs and brewaries are being pushed to breaking point due to "spiralling inflation", according to the CEO of the British Beer and Pub Association.

Emma McClarkin warns that many will be forced to shut doors for good if urgent action isn't taken,

She adds: “The last thing pubs and brewers want to do is put prices up for loyal customers but are stuck between a rock and hard place.

"The cost of running their businesses has become completely unsustainable, the price of key ingredients and utilities are rocketing, and now their customers will, understandably, be tightening their belts even further following the news of interest rates rising."

She called on the government to call on the beer duty freeze to be reinstated - this was one of the policies announced by Kwasi Kwarteng in his mini-budget and then subsequently axed by Jeremy Hunt last month.

BBC Radio 5 Live

Our colleagues at BBC Radio 5 Live have been hearing from people across the country on the effects of rising interest rates.

Brad Marshall in Bradford says: “My mortgage comes off the fixed rate on the 1st of December, I’ve had it for five years fixed. I pay about £450 a month now but it’ll go up to just under £800 a month.”

Brad is self-employed and fits kitchens and bathrooms.

“After Christmas it’ll go really quiet, and the funds are not going to be there to pay the mortgage.

“We’ve got a bit of savings but not massive amounts. It’s quite a jump for us, over £300 more a month.”

“I’ll have to shop around, that’s unaffordable for me,” he adds.

Brad says that he won’t be booking any holidays next year.

“We’re not putting the central heating on, I don’t know what the future holds really.”

Vanessa - not her real name - also got in touch.

She is on a variable rate, self-employed and has struggled to re-mortgage for the past few years.

“The company I ran last year went into administration because I couldn’t pay back the loan that I got during the Covid pandemic.

“I wasn’t getting a lot of money during furlough either,” she says. “Now I’m in a situation where not only the mortgage rate is going up, my interest rates on my credit cards, electricity bills, all are going up. It’s never ending.”

She is 46 and has no children. Her husband is working nearly 12 hours a day.

“It shouldn’t be like this, it shouldn’t this stressful."

If you're just joining us or checking in at the end of a busy day, here's a rundown of what we learned from the UK's central bank about the economy on Thursday:

• The UK is facing its longest recession on record
• The unemployment rate is set to rise significantly over the next two years to 6.4%, the Bank predicts
• Many homeowners will face higher mortgage repayments in the next two years
• The rate of inflation, which measures the increase in prices over time, is expected to peak at 11% this winter before falling sharply next year
• Interest rates won't go up as much as previously expected

If you're looking for something to read on the commute home, business reporter Michael Race has gone into more detail here.

Sterling fell sharply following the the Bank of England's interest rate decision.

The Bank's warnings over a prolonged recession saw the pound drop by nearly 2% to 1.12 against the US dollar in London trading. It also finished 0.7% lower against the euro.

So, what does a falling pound mean?

Well, a drop in the value of the pound will increase the price of goods and services imported into the UK from overseas.

That's because when the pound is weak against the dollar or euro, for example, it costs more for companies in the UK to buy things such as food, raw materials or parts from abroad.

However, London's FTSE 100 share index ended the day up 0.6% on the expectation that some UK-listed companies could be on track to make higher profits on the back of a falling pound. The index includes a number of multi-national companies and exporters that benefit from a low sterling exchange rate.

• You can read more about what a falling pound means for your finances here

Image source, EPA

An expert in mortgage finance has suggested the government could consider intervening and cap the amount of profit that lenders can make on top of the base rate to help borrowers.

Dr Alla Koblyakova, of Nottingham Trent University, says around 80% of UK mortgage borrowers are on variable, tracker or short-term rate mortgages of up to three years.

"This equates to more than eight million households in the UK," she says.

"Many of those fixed-term mortgages will be ending soon.

"That is a huge amount of people who will soon be exposed to much higher interest rates, and the impact on house prices is going to be extremely negative in the short run."

Dr Koblyakova says: "If the government introduced a cap of 1.3% on lenders’ margins, for example, the monthly mortgage bill for the average UK household could be reduced by £150 per month.

Faisal Islam
Economics editor

The Bank of England is like the organiser of a bonfire night party. In one hand it has the jerry can full of petrol to fling over a pile of wet logs, in the other there's a fire extinguisher ready to put it out almost at the same time.

Today's interest rate rise is designed to dampen down the economy and contain soaring prices. But the other announcement, that future rate rises will be limited, and peak interest rates should not rise above 5%, shows just how worried the Bank is about the overall impact on the economy, and especially the mortgage market.

The UK is facing the start of a "very challenging" two-year recession, according to the Bank, the longest recession ever recorded in official statistics, and yet interest rates will carry on going up, after eight rises, including today's jumbo rise to 3%.

• You can read more about the balancing act faced by the UK's central bank in Faisal Islam's latest blog post here.

Charities are warning many households are coming under intense pressure with shop prices, mortgage rates and rental costs all going up.

Morgan Wild, head of policy at Citizens Advice, said "people are facing a double whammy of soaring interest rates and sky-high inflation".

Increasing interest rates are also expected to put further upwards pressure on rents, as landlords hike their rents to cover their own rising costs. Meanwhile, further reductions in the choice of rental homes, if more landlords decide to exit the market, could also put an upward pressure on rents.

Jane Tully, director of external affairs and partnerships at the Money Advice Trust, which runs the National Debtline and Business Debtline, said: "Household finances are facing a perfect storm of both the damage done by high inflation, and now higher mortgage payments and rents, as landlords pass rate rises on."

Our experts have set out six things you can do to address cost of living increases here.

Image source, .

Another striking comment made by the Bank of England governor during his press conference was around unemployment.

Bank of England Governor Andrew Bailey expects the unemployment rate to almost double by 2025.

The Bank expects unemployment to peak at around 6.5% by the first few months of 2023. Currently the rate is 3.5%.

Earlier we heard from Chancellor Jeremy Hunt - and now we can bring you some more comments from Downing Street following the interest rate rise.

A No 10 spokeswoman accepted there will be "difficult choices" for the government - a reference to widely-expected spending cuts it will announce to meet its self-imposed rules aimed at reducing debts over the next couple of years.

"The prime minister recognises that this will be a worrying and difficult time for people, families and businesses across the UK.

"The number one priority for his government is bringing down inflation.

"There will be some difficult choices, but we will ensure that we are actually fairly, protecting the most vulnerable and continuing to seek long term growth."

No 10 adds it is only through "sound management of public finances" that the government can provide "long-term economic stability".

But, the Downing Street spokeswoman would not "pre-empt" anything to come in the autumn budget.

• You can read more about what the Autumn Statement will mean for your money here

Image source, Getty Images

The British Chambers of Commerce has described the interest rate rise as "further bad news for businesses".

Its head of research, David Bharier, said many firms were already struggling because of rising costs of raw materials, energy and borrowing - all while demand from customers is going down.

He pointed out that pressure could continue to mount on businesses as help with energy bills expires next April.

“With the chancellor and prime minister both signalling that the Autumn Statement is likely to result in spending cuts and tax rises, businesses will be extremely worried about what the future holds," he said.

He added that it was "crucial" for the government to set out a long-term plan to stabilise the economy and help it grow.

The Bank of England's governor Andrew Bailey says it is now up him and other policy makers to “roll up our sleeves up and demonstrate UK policy making is back in action".

He was speaking to the BBC's economics editor Faisal Islam.

Ben King
Business reporter, BBC News

The 0.75% rise is the biggest sustained increase since 6 October 1989 when rates were raised by 1.13% (excluding a short-lived hike on Black Wednesday in 1992 - see below).

It is also the biggest move since 4 December 2008 when rates were cut by 1%.The previous month they were cut by 1.5%.

On Black Wednesday, 16 September 1992, the Bank rate was hiked 5% over the course of a day in a failed attempt to keep the pound within the trading range of the European Exchange Rate Mechanism. It was cut back to 10% the next morning.

The UK’s standing has been damaged by the government's mini-budget, the governor of the Bank of England has told BBC News.

Andrew Bailey says it is now up him and other policy makers to “roll up our sleeves up and demonstrate UK policy making is back in action".

Bailey adds the British economy, along with other countries, has been "hit by a huge shock" - but also says he believes stability has returned to the financial markets.

He acknowledges that the less worth off will be hardest hit as they spend a greater amount on essentials like food and fuel.

The Bank has predicted the unemployment rate would double by 2025.

Bailey also admitted that to the recovery would not be a quick one and "it is going to be a long haul out" of the poor economic situation.

He says the UK labour force is now smaller than it was in 2019 but predicts the UK economy will emerge from the predicted recession.

Kevin Peachey
Cost of living correspondent

It is too early to tell whether this interest rate rise will be passed on in full to the rewards offered to savers.

Whatever happens, interest rates on savings accounts are considerably better than they have been for some time.

Experts are urging people to review their finances, mainly because leaving money in the same account for years may mean you are getting very little in interest.

The problem is that, however big the increase in savings rates, the buying power of the cash held in savings is diminishing as a result of soaring prices.

Image source, Getty Images

Tim Bannister from property website Rightmove has said that "the era of historically low interest rates looks to be over", making it more difficult for those new first-time buyers hoping to get on the housing ladder.

But, he pointed out that mortgage rates have started to stabilise and fall after the market turmoil seen in the wake of former Chancellor Kwasi Kwarteng's mini-budget.

"As today’s rise was expected, we don’t think we’ll see any significant changes to new fixed rate deals based solely on today’s interest rate rise," he said.

He added: "It’s important to look beyond the headline numbers, because, while 'like-for-like' mortgage costs have been increasing, mortgage brokers and lenders will be able to help people assess the different options available to manage their costs and see if they can afford to move."

The shadow chancellor has been giving her reaction to the Bank of England's comments following the interest rate rise.

Rachel Reeves criticised the Tory government, saying it had not "seized opportunities" for growth in the 12 years it had been in power.

She said "there's no economic growth to be seen".

The government is "taking the difficult decisions" to bring down the UK’s debt, the chancellor has said.

After the Bank of England raised interest rates from 2.25% to 3%, Jeremy Hunt said the "best single thing we can do" is to help the Bank bring down inflation.

He added: “We are doing the same things that we are asking families to do, up and down the country."