Breaking: Bank of England hikes interest rates by 15bps to 0.25%, GBP surges

The Bank of England announced on Thursday that it would hike its benchmark interest rate by 15bps at 0.25%. The Monetary Policy Committee voted 8-1 in favour of the rate hike. 

Leading up to the meeting, markets had been pricing a roughly 60% chance of a hike, with these odds rising in wake of Wednesday’s hotter than expected UK November Consumer Price Inflation report, which came on the heels of a strong labour market report on Tuesday.

The majority of economists had expected the BoE to hold interest rates at 0.1%, though these polls (conducted by newswires) were released prior to Wednesday’s inflation surprise. Market watchers and participants, as indicated by various other polls (such as on social media) had seemed split over whether the BoE would hike or hold.