A quarter point increase in benchmark interest rate to 0.75 percent by Bank of England Governor Mark Carney was as expected by the market. The hike has been second increase in a decade and highest since 2009.
With all nine members unanimously voting for a hike (9-0), the market was caught by surprise. The attempt is probably to tame inflation before Britain leaves the European Union.
The committee wrote that it ‘continues to recognize the economic outlook could be influenced significantly by the response of households, businesses and financial markets to developments related to the process of EU withdrawal’.