The Bank of England has, as expected, raised British interest rates by a quarter point to 3.75%, the first hike in nearly four years.
The bank has become the first of the big four global central banks to end the rate-cutting cycle of recent years.
The BoE said in a statement accompanying its decision that the housing market and consumer spending had remained stronger than it had expected.
Given this, and the fall in sterling earlier this year, underlying inflationary pressures were expected to build up gradually. Rates had been at a 48-year low since July, when the central bank cut them by a quarter-point because of worries about the weakness of the global economy, which is now showing signs of recovery.
