LONDON, RAW – The Bank of England has raised its main interest rate to 0.25 per cent as inflation pressures mounted in the United Kingdom, becoming the first major central bank in the world to raise borrowing costs since the coronavirus pandemic hit last year.

Most economists polled by Reuters had expected the BoE to keep Bank Rate at 0.1 per cent due to a new surge in coronavirus cases.

The BoE’s nine-member Monetary Policy Committee voted by 8-1 to raise the bank rate to 0.25 per cent from 0.1 per cent.

The MPC also voted 9-0 to keep the BoE’s government bond-buying program at its target size of 875 billion pounds ($A1.6 trillion).

The BoE has also bought 20 billion pounds of corporate bonds.