Highlights: Bank of England's Carney speaks after raising interest rates

Anthony Devlin  Getty Images Samantha Lee  Business Insider Bank of England Governor Mark Carney

Here's Brooks one last time: "Earlier this year the BOE Governor Mark Carney said that the Bank would give its view on the latest equilibrium, or neutral, interest rate for the United Kingdom economy".

The monetary policy committee of the central bank, which determines the policy interest rate cited inflation concerns for its decision but retained its "neutral" stance.

Five of the six members on the rate panel voted for a rate increase.

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Mark Carney: "The committee's latest inflation projection is a little higher than in May, reflecting the effect of the recent rises in energy prices and the 2.5 percent depreciation of sterling". Highlighting the inflation, the MPC projected 4.6 per cent in Q2FY19, 4.8 per cent in H2 of FY19 and 5 per cent in Q1FY20.

The Reserve Bank of India governor-headed MPC in a statement, issued after three-day meeting, said, "robust corporate earnings, especially of fast moving consumer goods (FMCG) companies, also reflect buoyant rural demand".

"The swiftness with which the central bank has responded to the jump in inflation should prevent the need for very aggressive policy changes in the future", Capital Economics analyst Shilan Shah said in a note. "While a quarter-point rise may have a limited long-term financial impact on most businesses, it risks undermining confidence at a time of significant political and economic uncertainty".

It forecasts that growth rebounded to 0.4 per cent in the second quarter, with data pointing to a similar rate of growth between July and September.

Bank of England
Jim Edwards The outside of the Bank of England

"By front-loading the interest rate hikes, the RBI is looking at minimising the adverse impact of rising inflation on the economy as well as providing support to the rupee". The interest rate was hiked to 6.5 percent last time in April 2016.

Toni Smith, COO at PRIMIS and PTFS, said: "After months of speculation, the inevitable has finally happened - and only time will tell if this is the first of many increases to come or if - with Brexit on the horizon - the Bank of England may choose to reduce them once again".

Dheeraj Singh, Head of Investments & Fund Manager - Fixed Income, Taurus Mutual Fund: "The decision to hike rates has, quite clearly, been driven by the persistent increase in headline and core inflation that we have witnessed in the last couple of months".

Yes Bank's managing director and chief executive officer, Rana Kapoor, said, "With peak of CPI inflation now behind us, and monetary transmission playing out gradually hereon, I expect a pause in the remainder of FY19". Bank staff believe this weakness was temporary and expect the economy to expand by 0.4% in the second quarter.

Image copyright Reuters Image caption The Bank of England is expected to raise interest rates to 0.75% How has the economy performed?

In the third bi-monthly monetary policy statement for 2018-19, RBI said various indicators suggest that economic activity has continued to be strong.

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