The Bank of England's (BoE) monetary policy committee (MPC) voted to increase interest rates from 1.75% to 2.25% on Thursday (22 September) in an attempt to curb soaring prices.
In August, interest rates were raised by the highest margin in 27 years, following inflation figures hitting 9.9%.
Rapidly rising energy prices were cited by the Bank as one of the biggest driving factors in making its decision.
On Monday (26 September), the Governor of the BoE, Andrew Bailey, made a further statement, saying the Bank "will not hesitate" to raise interest rates further if necessary.
Bailey stated that the BoE is "monitoring developments in financial markets very closely", following the pound reaching a record low of $1.03 on Monday morning.
The announcement comes just days after Chancellor Kwasi Kwateng revealed his financial statement, introducing the largest package of tax cuts since 1972.
Commenting on the interest rate increase, the Bank said:
"The scale, pace and timing of any further changes in Bank Rate will reflect the Committee's assessment of the economic outlook and inflationary pressures. Should the outlook suggest more persistent inflationary pressures, the Committee will respond forcefully, as necessary."
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