The Bank of England hiked interest rates by 25 basis points on Thursday to 1.25% – the highest level in 13 years – amid surging inflation.
Six members of the Monetary Policy Committee voted for a 25 basis points hike, while three voted for 50 bps. Jonathan Haskel, Catherine Mann and Michael Saunders were the hawks. Many analysts had been pricing in a 50 bps hike.
The BoE said: “The scale, pace and timing of any further increases in Bank Rate will reflect the Committee’s assessment of the economic outlook and inflationary pressures.
“The Committee will be particularly alert to indications of more persistent inflationary pressures, and will if necessary act forcefully in response.”
Earlier on Thursday, the Swiss National Bank unexpectedly lifted interest rates for the first time in 15 years.
The Bank lifted its policy rate from -0.75% to -0.25%, where it has been since 2015. It marked the first hike by the SNB since September 2007.
The SNB said: “The tighter monetary policy is aimed at preventing inflation from spreading more broadly to goods and services in Switzerland.
“It cannot be ruled out that further increases in the SNB policy rate will be necessary in the foreseeable future to stabilise inflation in the range consistent with price stability over the medium term. To ensure appropriate monetary conditions, the SNB is also willing to be active in the foreign exchange market as necessary.”
On Wednesday, the US Federal Reserve increased interest rates by 75 basis points – its biggest hike since 1994. Meanwhile, the European Central Bank indicated last week that it would lift rates in July in the face of surging inflation.
