It looks like the Bank of England is really raising the stakes - interest rates have been hiked by 0.5 percentage points, bringing the base rate to a whopping 4%! This marks the tenth consecutive increase since December 2021, as the Bank is determined to bring inflation down to a more manageable 2%.
It's a scenario that's being repeated all over the world - the US Federal Reserve upped its rate as recently as Wednesday, and the European Central Bank is expected to follow suit on Thursday afternoon.
Unfortunately, the Bank of England's efforts to rein in prices and inflation seem to be in vain - inflation in the UK stands at a whopping 10.5%, more than five times higher than the Bank's target.
The government is really trying to tighten the economic belt - but with prices still going up, it looks like they'll have to do more to put us back on the road to recovery.
The rate rise could have quite an impact on house prices, according to high street banking giant, Santander.
The bank of Dave has predicted that house prices could fall by 10 percent this year, which is a real nightmare scenario for many with outstanding mortgages. The bank has said that higher base rates are likely to dampen demand, and with the cost of living crisis already causing customers to struggle with mortgage payments, this could lead to a recession.
For those looking to remortgage, the Labour Party has conducted analysis shows that the cost of an 80% mortgage on the median house price is set to rise in every constituency. with Londoners hit hardest.
Costs will soar by £13,980 in Kensington and £11,730 in the City of London and Westminster. The Bank of England's base rate hikes over the past year have cushioned fixed-rate mortgages, but those coming off low fixed rates are in for a nasty surprise.
Sheffield Hallam's mortgage costs are set to increase by £3,080, North East Derbyshire by £2,070, and Plymouth, Sutton and Devonport by £1,850.
Around 1.4 million households could be feeling the pinch when they renew their fixed-rate mortgages this year.