The Bank of England has raised interest rates by a quarter percentage point to 4.5%, accelerating the pace of its gradual monetary tightening following strong economic data.
A narrow majority of economists had expected a quarter point hike in the benchmark repo rate. The rise follows a similar hike a month ago, and is the fourth - all of a quarter-point - since November.
The three previous rate hikes had been at three-monthly intervals, in the same months as the BoE produced its quarterly inflation report, reflecting the Bank's stated aim of a gradualist and predictable monetary policy.
Today's rise therefore stepped up the pace at which the bank's Monetary Policy Committee has raised rates although inflation is running well below its 2% target.
However, a raft of positive economic data in recent months suggests inflation will rise above the target in two years' time, the horizon the BoE aims for.
UK economists also suspect booming house prices, which are rising at an annual rate of around 20% according to some surveys, are also a major factor in the BoE's decision-making. MPC members, however, have denied targeting house prices.
UK economists expect further rate rises over the coming year and futures markets are pricing in a repo rate of almost 5.5% by the end of year.
