The Bank of England raised its main interest rate to 0.25% as inflation pressures mounted in Britain, becoming the first major central bank in the world to raise borrowing costs since the pandemic hit last year.
Members of the Monetary Policy Committee (MPC) voted eight to one to raise rates from the historic low of 0.1 per cent.
The Bank warned that inflation could now peak at six per cent in April, while it also downgraded growth outlook to 0.6 per cent in the fourth quarter from a previous forecast of one per cent
It said: “The decision at this meeting was finely balanced because of the uncertainty around Covid developments…
There was, however, also a strong case for tightening monetary policy now, given the strength of current underlying inflationary pressures and in order to maintain price stability in the medium term.”
