Today, the Bank of England raised interest rates to 0.75 percent. This the highest level it has been since the lows of the financial crisis that began from March 2009 when the interest rate was cut to 0.5 percent.
However sterling fell 0.8 percent, despite the increase, as Mark Carney, the Bank of England Governor, reiterated that future interest rate rises would be "limited and gradual "
From the BoE's Monetary Policy Committee (MPC), all nine members voted to increase the base rate by a one quarter of a percent.
Many economists were predicting that there would be a split vote on this occasion, put down to the mixed signals for the strength of the UK economy as it stands.
The MPC stated that the UK economy had recovered from a seasonal slowdown which was enhanced by the Beast from the East.
The committee said, "The MPC continues to judge that the UK economy currently has a very limited degree of slack," in the minutes published with its decision.
"Unemployment is low and is projected to fall a little further. In the MPC’s central projection, therefore, a small margin of excess demand emerges by late 2019 and builds thereafter, feeding through into higher growth in domestic costs than has been seen over recent years."
Mr Carney, speaking after the decision, stated that pay-growth has increased, and there are further wage rises to be expected this year.
Although contrary to this, wage growth has stayed below pre-crisis levels and household debt has increased.
This means some households may struggle with the rise in future borrowing costs which may drag down the consumer spend that provides the drivers for much of the UK economy.
The BoE Governor, however, played down those concerns, by saying that the "costs of servicing that debt is lower now than it was before the crisis."