Interest rates on the rise.................

The Bank of England has raised interest rates for the second time in three months to try to curb a rapid rise in the cost of living.

The increase to 0.5% from 0.25% came as the Bank said inflation was on course to hit a 30-year high.

Prices are expected to climb faster than pay, putting the biggest squeeze on household finances in decades.

It comes as the chancellor unveiled a support package to help households cope with a 54% jump in energy bills.

Inflation, as measured by the consumer prices index (CPI) is expected to peak at 7.25% in April, and average close to 6% in 2022.

This is well above the Bank's 2% target, and would be the fastest price growth since 1991.

Policymakers also said there were increasing signs of broader price pressures across the economy.

Prices of household appliances such as fridges had climbed almost 10% over the past year.

Goods shortages also meant retailers were offering fewer bargains in the January sales compared with previous years.

The Bank said food prices and rents were also likely to creep up in the short term