The Bank of England (BoE) surprised financial markets by raising interest rates by a quarter percentage point to 4.75 per cent today to tackle above-target inflation.
The majority of economists had predicted the bank's Monetary Policy Committee would leave rates unchanged for the 12th month running.
Policymakers had given no sign they were about to move, although inflation had jumped to half a percentage point above their 2 per cent target in June, and soaring household bills suggested it was set to rise further still.
The BoE will publish its new quarterly forecasts for growth and inflation next Wednesday.