Bank of England shocks with huge interest rate hike

What they're saying: In a release, Bank of England officials said recent economic data suggested "more persistence in the inflation process, against the background of a tight labour market and continued resilience in demand."

• Analysts expected the central bank to hike rates by a quarter percentage point.

Catch up quick: The latest inflation data underscored the U.K.'s struggle to stamp out rapid price increases.

• The nation's Consumer Prices Index rose by 8.7% in the 12 months through May, unchanged from the prior month, its statistics agency said on Wednesday.
• But the core measure that excludes energy, food, alcohol and tobacco increased by 7.1%, up from 6.8% in April — an and a new high since the country's inflation struggles began.

The bottom line: Major global central banks, including the Bank of England, had backed off outsized interest rate hikes — opting to return to smaller increment moves as it looked like the worst of inflation was behind them.

• That's no longer the case for the Bank of England, the latest sign that hot inflation is pushing economic policymakers to raise rates more quickly — and to higher levels — than initially expected.