Why does VS Code not run my programs while Pycharm does?

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Edit: I fixed the issue by installing version 1.68.1, it was the update that caused these issues for me!

VS Code gives senseless errors when running my programs. The exact same programs run fine in PyCharm so this is definitely caused by the editor, not the code. It seems like it is not recognising my files/folders inside my project, I have two examples.

  1. FileNotFoundError: [Errno 2] No such file or directory. Even though the path is 100% correct. It's as simple as a single folder with a single file file and they are in the same directory as the python file.

  2. ModuleNotFoundError: No module named 'blog'. It is not recognising my init file, even though it was perfectly working yesterday. I was working on something totally unrelated to imports, modules or the init and all of the sudden I am getting these errors. I even downloaded code of a great Flask tutorial with an init file and I got the same problem.

And oh, when running both programs with Pycharm, they work just fine.

Exactly 24 hours ago, my programs were working fine. Around 3 hours later I started to get these problems. And I did not change anything on my computer in terms of paths, folders or whatever. Maybe an update caused these problems?

Anyone else experiencing issues? I tried re-installing but it didn't work

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