The Bank of England surprised markets by raising interest rates by 50 basis points, marking its 13th consecutive increase. The move took the Bank's base rate to 5%, defying market expectations of a 25 basis point hike. The decision was made in response to persistently high inflation, with consumer price inflation in the UK remaining at 8.7% in May. Core inflation, which excludes volatile items, reached its highest level since March 1992 at 7.1% year-on-year in May. The Bank of England acknowledged the persistence of inflationary pressures and said it would closely monitor indicators such as labor market conditions, wage growth, and services price inflation. The impact of the rate increases will take time to fully feel due to the large number of fixed-rate mortgages in the market. Since the end of 2021, the Bank of England has raised its main rate from 0.1% to 5%.