The age of loose money might be coming to end. Major central banks across the world are embarking on a cycle of tighter monetary policy. On Thursday, the Bank of England hiked its base interest rate — the rate at which it lends to commercial banks ­ — for the second time in a row. Just under half of the bank’s Monetary Policy Committee wanted a bigger hike.

The move has been prompted by sharp increases in certain prices relative to their level this time last year. Both the European Central Bank and the Federal Reserve in the United States have signaled they might follow suit in the coming months, with several increases already “priced in” by markets.

The low borrowing costs of the last decade had granted households, firms, and governments a small measure of reprieve. For households in the UK and across the world, it was nonetheless a decade in which living standards declined. What higher interest rates will now ensure is that those living standards will drop further.