The apex bank has raised interest rates for the most number of times in 27 years. With inflation now set to hit over 13 percent, the borrowing costs have been increased by 0.5 percentage points to 1.75 percentage points.
Bank of England Governor Andrew Bailey stated that he had "huge sympathy and huge understanding for those who are struggling most" within the cost of living crisis, according to the BBC.
"I know that they will feel, 'Well, why have you raised interest rates today, doesn't that make it worse from that perspective in terms of consumption?', I'm afraid my answer to that is, it doesn't because I'm afraid the alternative is even worse in terms of persistent inflation," he added.
It has been forecasted that the economy will shrink in the last three months of the year and will keep shrinking until the end of 2023.
Lashing out at Nadhim Zahawi, the current Chancellor of the Exchequer, Shadow Chancellor Rachel Reeves of the Labour Party said the government had "lost control of the economy, with skyrocketing inflation set to continue, while mortgage and borrowing rates continue to rise," as reported by The Guardian.
Additionally, Rebecca McDonald, who is the chief economist at the Joseph Rowntree Foundation, said that the "staggeringly" high inflation was "going to hit low income families hard".
"Many took on credit to pay their bills and are falling behind on their payments. This will be much harder to pay off with higher interest rates putting more families in financial peril," she was quoted as saying by the BBC.
(With inputs from BBC and The Guardian.)