The Bank of England (BoE) raised interest rates to 0.5 per cent on Thursday and nearly half of its policymakers wanted a bigger increase to contain rampant price pressures, as the central bank warned inflation will soon top 7 per cent.
In a surprise split decision, four of the nine members of the Monetary Policy Committee (MPC) wanted to raise interest rates by half a percentage point to 0.75 per cent. This would have been the biggest increase in borrowing costs since the BoE became operationally independent 25 years ago.
Meanwhile in EU land:
The European Central Bank kept policy unchanged as expected on Thursday, curbing stimulus over the coming months but maintaining plenty of support for the economy even after inflation unexpectedly hit a fresh record high.
After the ECB extended support measures only in December, policy change was not expected to be on the agenda. But stubbornly high inflation – which rose to 5.1 per cent last month in the 19-country euro zone – is complicating life for the bank and ECB president Christine Lagarde will be under pressure to address the issue in her lunchtime news conference.