Bank of England hikes rates for the first time in a decade

The (BOE) raised interest rates for the first time in more than 10 years Thursday, a landmark move after borrowing costs had slumped to the lowest level on record.

Alongside Governor Mark Carney, the majority of rate-setters at the U.K.‘s central bank voted in favor of hiking the benchmark rate to 0.5 percent from 0.25 percent. The bank‘s key rate is crucial for the economy as it is used to price all sorts of bank loans and mortgages.

Investors had a 0.25 percent move upwards in the interest rate, with the BOE now reversing the emergency rate cut announced in August last year in the wake of the vote.

In one of the most closely watched interest rate decisions since the financial crisis, the BOE said it projected “very gradual” further increases over the next three years.

Ahead of the announcement Thursday, the BOE had expressed concern that the U.K.‘s economy had been overheating, with inflation soaring to a five-year high of 3 percent in September and unemployment hitting multi-decade lows. And in addressing these concerns, Carney said Thursday, “the time has come to ease our foot a little off the accelerator.”