The Bank of England raised interest rates marking its first time since the pandemic era in an attempt to combat inflation and revive the U.K. economy.
Led by Governor Andrew, members of the committee voted 8-1 to increase the interest rate by 15 basis points to 0.25%.
Policy marker’s noted “modest” tightening is needed to face the headwinds faced by inflation which is likely to hit around 6% in April next year. Earlier, November’s inflation came is decades high at 5.1%.
The BoE’s decision came as a surprise to the market since the U.K. is facing another round of COVID-19 resurgence.
Earlier on Wednesday, U.S. Federal Reserve laid out a plan to increase rates in the following year early Spring just when tapering is wrapped up.