Despite fears of a recession, Bank of England policymakers raised the benchmark rate by a half percentage point on Thursday, in a 3-way split vote, taking the rate to the highest since 2008.
The nine-member rate-setting committee decided to raise the bank rate by 50 basis points to 2.25 percent from 1.75 percent, in a split vote.
The seventh straight rate hike has taken the interest rate to the highest since November 2008.
Five members of the committee voted for 0.5 percentage points increase, three members preferred a 75 basis-point hike, while one member sought a quarter point increase.
Policymakers reiterated that policy is not on a pre-set path and the committee will, as always, consider and decide the appropriate level of Bank Rate at each meeting.
The monetary policy committee unanimously decided to begin the sale of UK government bonds held in the Asset Purchase Facility shortly after this meeting.
Given the Energy Price Guarantee, policymakers said the peak in consumer price inflation is expected to be lower than projected in the August Report, at just under 11 percent in October.
Nonetheless, inflation is forecast to remain above 10 percent over the following few months, before starting to fall back.
Bank staff forecast the economy to shrink 0.1 percent in the third quarter instead of 0.4 percent growth projected in August, and a second successive quarterly decline.
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