LONDON — The Bank of England on Thursday hiked interest rates for the first time since the onset of the pandemic, increasing its main interest rate to 0.25% from its historic low of 0.1% as inflation pressures mount.

U.K. inflation hit a 10-year highThe Consumer Price Index rose 5.1% in November, up from 4.2% October. This is well ahead of the central bank’s target of 2.

In the meantime, labor market recovery continues to be strong, with 257,000 employees added to the payroll in November even though the furlough programme was over.

Many analysts believed that after the Bank had resisted a November rate increase, it was clear that economic conditions would allow for tightening.

The emergence of the Omicron variant has however made it possible to its rapid spread in the U.K.Markets were left wondering as the outlook has changed since Thursday’s policy meeting.

The International Monetary Fund on TuesdayHe had advised British policymakers that they should avoid an “inaction bias”, ahead of the referendum.

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