Announced at noon today interest rates rose 0.5% to 1.75%.
This is the highest level since December 2008 and the largest single rise since 1995.
The rise will hit mortgage payers on a variable rate.
The move comes as inflation is forecast to rise to 13.3% in October.
The Bank of England are also forecasting that the UK will be recession from the last quarter of this year and throughout next year.