The Bank of England has warned the UK will fall into recession as it raised interest rates by the most in 27 years.
The economy is forecast to shrink in the last three months of this year and keep shrinking until the end of 2023.
Governor Andrew Bailey said he knew the cost of living squeeze was difficult but if it didn't raise interest rates it would get "even worse".
The main reason for high inflation and low growth is soaring energy bills, driven by Russia's invasion of Ukraine.
A typical household will be paying almost £300 a month for their energy by October, the Bank warned.
Now rates have gone up to 1.75%, homeowners on a typical tracker mortgage will have to pay about £52 more a month. Those on standard variable rate mortgages will see a £59 increase.