The full story behind UK interest rate hikes

Mervyn King may have commented that he wanted interest rate policy setting to be 'boring', but the the MPC clearly has a flamboyant streak - as demonstrated by this month's shock rate hike. So what do the data and MPC minutes reveal about their decision - and should we expect further rate rises?

Once upon a time, not too long ago, Bank governor Mervyn King

commented that it was his intention to make monetary policy setting "boring". But Bank governors clearly have a flamboyant streak lurking behind endless grey suits and so early August's surprise 0.25% point increase in the UK's base rate, to 4.75% (and reversing August 2005's isolate rate reduction) caught most financial market operators on the hop.

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