The pound soared on currency markets today after the Monetary Policy Committee (MPC) unexpectedly voted to raise interest rates by 0.25% to 4.75%. The surprise move is designed to combat rising inflationary pressures within the UK economy.

Analysts had widely predicted that the MPC would hold rates steady, citing concerns about slowing economic growth. However, recent data showing a sharp increase in consumer spending and rising house prices appear to have swayed the committee towards a more hawkish stance.

The immediate impact of the rate hike was a significant strengthening of the pound against both the US dollar and the euro. Exporters may face challenges as a result of the stronger pound, while importers will benefit from lower costs. Consumers with variable rate mortgages will likely see their monthly payments increase.

The Bank of England will closely monitor economic data in the coming months to assess the impact of the rate rise and determine whether further tightening is necessary.