Rising inflation spooks Bank of England rate-setters into taking action

Analysis: on this occasion the MPC has decided the threat of inflation becoming embedded is greater than the risk to growth

The Bank of England is making a habit of pulling surprises. In November, financial markets were taken aback when Threadneedle Street kept interest rates on hold at 0.1%. This time they were caught on the hop by the decision to raise them to 0.25%.

It's not hard to see why traders in the City have been left scratching their heads given that the explanation for doing nothing in November - uncertainty about the real state of the economy - seems to apply just as much to today's circumstances.