The Bank of England has today warned that the UK may fall into recession this year as they raised interest rates from 1.25% to 1.75% in a bid to stop rising costs.

The Bank of England are expecting the economy to shrink in the final three months of this year and continue shrinking until the end of 2023. Making it the longest downturn in the economy since the 2008 financial crisis.

The new slump was blamed largely on increasing gas prices following Russia's invasion of Ukraine earlier this year, with warning that the typical energy bill will hit £3,500 in October. This means that the average household may end up paying almost £300 a month on energy bills.

The Bank of England have said that this sharp rise in energy bills, which is almost three times more when compared to a year ago today, is the drive of inflation - the rate at which prices rise - to 13%, makes it the highest level for 42 years.

The Bank warned everyone that the UK's economic growth was already slowing down before the Russian invasion of Ukraine, adding: "The latest rise in gas prices has led to another significant deterioration in the outlook for the UK and the rest of Europe".

The interest rate rise is the sixth increase in recent months, as the Bank of England battles to dampen inflation. Increasing interest rates is a method often used to slow down and try to control inflation; it raises the costs of borrowing and should encourage people to borrow less and spend less. It also encourages the average person to save more too.

The Bank said it knew the cost of living increases are extremely difficult for many people. However, they have said that if high inflation lasts a long time, thing may become even worse.