Sterling fell against the dollar today after the Bank of England delivered an expected half-percentage-point hike in interest rates, its ninth in a row, as it battles to bring down inflation which the bank said has now peaked.

The 0.5% increase was widely expected.

But the announcement revealed a widening split between monetary policy committee members (MPC) members, darkening the visibility onfuture rate hikes from the central bank.

The pound fell to a session low after the decision at midday, trading down as much as 1.2%. It was last down 0.84% to $1.23140, back to levels where it had been before the central bank's decision.

Against the euro the pound also fell, and was last 0.34% softer against the euro, trading at 86.19 pence.

The Bank of England unveiled its eighth bank rate increase of 2022, striking a dovish tone as market players kept a close eye on how each of the nine MPC members voted.

"The extent of the divisions across the committee is an eye-opener," said Philip Shaw, chief economist at Investec in London.

One policymaker, Catherine Mann, wanted a bigger rate rise this month to the tune of 75 bps, the same as in November - which was the Bank of England's largest in more than 30 years - to tackle what she viewed as increased inflation risks since November.

However two other policymakers, Silvana Tenreyro and Swati Dhingra, who had opposed the size of November's increase, said it was now time to halt rate rises entirely, as what had been done so far was "more than sufficient" to get inflation back to target.

"While it is normal to see policymakers disagree towards the end of a rate cycle, the split makes it more difficult to predict the extent to which interest rates will rise," Shaw said.

Data earlier this week showed UK inflation easing from a 41-year high but it remains at 10.7%.

In a busy week for central bank decisions, the Swiss National Bank and Norway's central bank hiked rates today and the European Central Bank is set to raise interest rates for a fourth time in a row later in the day.