The Bank of England has raised interest rates for the first time in a decade to head off rising inflation putting the squeeze on UK households.

The central bank’s Monetary Policy Committee voted 7-2 in favour of increasing the base rate from 0.25pc to 0.5pc.

However, the pound plunged on currency markets as traders interpreted the MPC’s commentary as indicating that another rate rise is off the table for the foreseeable future.

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