The bank's nine-member Monetary Policy Committee voted unanimously to raise the rate from 0.50 per cent to 0.75 per cent, the highest level since March 2009.
The Bank of England has raised interest rates above 0.5 per cent for the first time in almost a decade in a decision that will affect millions of savers, mortgage holders and borrowers across the UK.
SNP economy spokesperson Kirsty Blackman MP added: "The hike in interest rates will deliver a further blow to the living costs and standards of millions of families across the United Kingdom, who are already feeling the squeeze as prices rise too fast". With regard to inflation, RBI said, it is projected at 4.6 per cent in second quarter, and 4.8 per cent in the second half of 2018-19.
The Bank of England has raised the base rate to 0.75%, just the second time it has been hiked in a decade.
The pound fell 0.5% against the U.S. dollar and 0.2% versus the euro, despite the rate rise and unexpected unanimous backing of the MPC for the move.More news: National Archives to review all Kavanaugh records by October, potentially delaying confirmation
HDFC's chief economist, Abheek Barua, said, today's policy decision suggests that the RBI seems to be taking a long term view on inflation rather than remaining purely data dependent.
Based on an overall assessment, it said, GDP growth projection for 2018-19 is retained, as in the June statement, at 7.4 per cent, ranging 7.5-7.6 per cent in first half and 7.3-7.4 per cent in second half, with risks evenly balanced.
"It's very unlikely that the conditions over the next six to eight months will warrant another move in monetary policy", said Dean Turner, U.K. economist at UBS Wealth Management.
"Limited, because we think the structural factors that have pushed down the trend equilibrium real rate are likely to persist. Given this, we have to ensure that we run a tight ship on the risks that we control to maximize the chances of ensuring macro-economic stability and continuing with the growth profile of 7-7.5 percent".More news: Spain, Portugal swelter as heat wave kills 3 people
The Bank had backed away from a rate rise earlier this year after growth slowed down sharply to 0.2 per cent in the first quarter, but said the economy had recovered as predicted.
The Fed, which is expected to keep rates on hold at a two-day meeting that ends later on Wednesday, has already raised rates twice this year, while the Bank of England is poised to raise rates at a meeting on Thursday.
This the 1st time since October 2013 that repo rate has been hiked at 2 consecutive RBI policy meetings.
The Bank of England will also release its latest forecasts for economic growth, jobs and inflation on Thursday.More news: 8 states sue Trump administration over 3D-printed gun instructions
John Macintosh, head of tax in for Deloitte in scotland, said: "Sub-trend growth and a cloudy outlook hardly make a compelling case for a higher United Kingdom rates".
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