The Bank of England has unveiled the biggest interest hike for 30 years as it seeks to tame double-digit inflation, warning the UK is already in recession which could be the longest since comparable records began.

The rate rose by 0.75 percentage points to a fresh 14-year high of 3%.

The decision is aimed at curbing inflation ahead, some of which will be attributed to the mini-budget announced by the Truss government in September, which hit the value of the pound and made imports more expensive.

It was widely anticipated by financial markets as major central banks double down on the price pressures facing Western economies – largely a consequence of Russia’s war in Ukraine – at the expense of economic growth.

The action against inflation, however, means that borrowing becomes more expensive, with floating mortgage holders on rates tied to Bank rate facing higher monthly payments.

At the same time, those seeking new fixed rate deals still face paying more than 6% as a result of the spike that followed the mini-budget market turmoil.