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The decision by the bank’s Monetary Policy Committee came after the U.K. statistics agency surprised policymakers Wednesday by reporting that in February, driven by the cost of food, clothing and dining out.

Before the figures were released, many analysts had expected the Bank of England to keep rates on hold following the and the ensuing troubles at Switzerland's Credit Suisse, which forced a .

The bank will “continue to monitor closely indications of persistent inflationary pressures," it said in announcing its decision. “If there were to be evidence of more persistent pressures, then further tightening in monetary policy would be required."

Still, Thursday’s move was since May 2022 as the Bank of England forecasts a steep drop in inflation later this year. Inflation is expected to slow to 2.9% by the end of the year as and big price increases recorded last year drop out of the calculation.

Raising interest rates increases the cost of borrowing, which reduces spending and relieves upward pressure on prices. But it also tends to .

Central bankers worldwide are struggling to balance as they try to rein in inflation, which erodes savings and increases costs for consumers and businesses, without unnecessarily damaging economies weakened by the COVID-19 pandemic and .

Following the collapse of Silicon Valley Bank in California and the , policymakers also are concerned that banks around the world may curtail lending, further crimping economic growth.

The Fed raised its key interest rate by a quarter-point Wednesday as Chair Jerome Powell tried to reassure Americans that it is safe to leave money in their banks.

The by half a point Thursday and declared that the government-orchestrated takeover of Credit Suisse by rival Swiss bank UBS “put a halt to the crisis.�

A week ago, the by a large half-point, brushing aside the financial market jitters and .

The economic situation is even more complex in Britain, where a and limited storage capacity have left energy users particularly following Russia’s invasion of Ukraine.

The gas crunch took an unexpectedly big toll in February, when the high price of energy needed to heat greenhouses, combined with bad weather in southern Europe and Africa, led to a like peppers, cucumbers and spinach.

That contributed to an , the biggest increase in 45 years.

Britain also is still adjusting to the , which reduced trade with its neighbors, curtailed the supply of cheap labor and slowed economic growth.

The Bank of England and the government have been focused on trying to prevent those cost pressures from becoming embedded in the economy, driving up wages and further fueling inflation.

“We’ve moved from a situation where there was at least a measure of clarity from central banks to one where even they must be second-guessing themselves,� Russ Mould, research director at the U.K. investment platform AJ Bell, said before the rate decision was announced.