Do you want to know why inflation is bad and why the Bank of England is rising interest rates?

Inflation refers to the rise in prices of goods and services over time. When inflation is high, your money doesn't go as far because everything gets more expensive. Imagine you could buy a loaf of bread for £1 last year, but this year it costs £1.20. That's because of inflation. If your wages or savings aren't increasing at the same rate as inflation, you'll find it harder to buy things or maintain your standard of living.

Inflation can be bad for several reasons:

• It reduces the purchasing power of money, meaning your money buys less.
• If it's unexpected, businesses might struggle to set the right prices for their products.
• People might delay spending because they expect prices to keep rising.
• If wages don't keep up with inflation, people might feel poorer and become less confident about the economy.

The Bank of England (and other central banks) has a tool to try and control inflation: interest rates. Here's how it works:

When the Bank of England raises interest rates, borrowing money becomes more expensive, and saving money becomes more attractive. If borrowing is more expensive, people and businesses might cut back on spending and borrowing. This reduced spending can slow down the economy a bit and, in turn, help reduce inflation.

On the other hand, when saving becomes more attractive because of higher interest rates, people might decide to save more and spend less. This again reduces the demand for goods and services, which can help to control rising prices.

So, the Bank of England raises interest rates to make borrowing less appealing and saving more appealing, which can help cool down an overheated economy and keep inflation in check.