Britain's central bank warned on Thursday that the U.K. is facing its longest-ever recession, and it predicted the country's unemployment rate could double by 2025. The Bank of England's announcement came as it raised the base interest rate from 2.25% to 3%, giving it the most significant hike in 33 years amid dire economic forecasts.

Inflation has been soaring in the United Kingdom at its fastest rate in decades, with food and energy prices exploding, due in part to Russia's invasion of Ukraine. The bank believes that by raising its benchmark interest rate, and thus increasing the cost of debt, including mortgages, it will encourage people to stop spending money and contribute to lowering prices.

Bank boss Andrew Bailey acknowledged a "tough road ahead," and he warned that action had to be taken now by the government or things "will be worse later on."

The European Union has been hit hard by the energy price hikes caused by the war in Ukraine. Central banks around the world are struggling to contain rising inflation, which has stuck around longer than many pundits predicted and is contributing to demands for wage increases. But the U.K. has fared worse than its neighbors thanks to factors including the ongoing fallout from Brexit, Britain's break with the European Union and a recent period of political turmoil that sapped investor confidence in the country and devalued the pound.

"The most important thing the British government can do right now is to restore stability, sort out our public finances, and get debt falling so that interest rate rises are kept as low as possible," said U.K. Finance Minister Jeremy Hunt.

The Bank of England rate rise came after the U.S. Federal Reserve announced its sixth interest rate hike of the year on Wednesday.

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