The UK central bank surprised the markets.

Despite the uncertainty surrounding the Omikron impact, it decided on Thursday to raise the key rate from 0.1 to 0.25 percent.

The Bank of England (BoE) justified this with its inflation target of 2 percent.

In November the inflation rate on the island climbed to 5.1 percent, the highest level in a decade.

According to the BoE forecast, inflation will rise to around 6 percent in the spring.

The British move is the first rate hike by a major central bank in a long time.

On Thursday the European Central Bank announced its further monetary policy course.

It is generally expected that the ECB will not raise the key rate for a long time.

The US Federal Reserve decided on Wednesday evening to tighten its monetary policy a little and to reduce its bond purchases more quickly.

However, London has now sent the strongest signal.

On the markets, the British pound reacted with a jump in rate to the interest rate hike, which the majority of analysts and economists had not expected.

The pound exchange rate climbed by more than half a percent to 1.18 euros.

The decision of the nine-member Monetary Policy Committee of the Bank of England under its Governor Andrew Bailey came with a clear majority of eight to one.

Apparently, the strong labor market development in Great Britain and the strong inflationary dynamics in particular convinced the central bank that an interest rate hike was necessary.

Holger Schmieding, chief economist at Berenberg Bank in London, called the decision sensible - despite Omicron.

"Inflationary pressures are high and look like they will last longer."

Therefore, the interest rate hike was correct.

Suren Thiru, chief economist at the British Chamber of Commerce and Industry BCC, called the decision "surprising in view of the increasing uncertainty about the economic effects of the Omicron virus variant".

Today's interest rate hike will initially have little effect on most companies.

“But many will see it as the first step in a longer monetary policy move”.

Many economists had expected the central bank to wait and see because of the slowdown in economic activity caused by the latest measures against Omikron.

Before the meeting, the members of the Monetary Policy Committee had not made a public commitment.

A month ago, the BoE got the markets off the beaten track in exactly the opposite way.

A rate hike was expected by the majority in November, but it did not materialize.