The Latest: Bank of England chief says rate hike was due

LONDON (AP) - The Latest on the Bank of England's monetary policy decision (all times local):

12:55 p.m.

Bank of England Governor Mark Carney says that in many ways the decision to raise interest rates for the first time in a decade was "straightforward" and that now was the "time to ease our foot off the accelerator."

He explained the decision in light of above-target inflation and a 42-year low in unemployment.

He acknowledged, however, that the "modest adjustment in interest rates" has taken place at a time of uncertainty related to Brexit.

He said these are "not normal times."

Britain's exit from the EU, he says, will "redefine the U.K.'s relationship with our largest trade and investment partner."

Carney adds that Brexit is the "biggest determinant" of the British economy's outlook.

He spoke after the central bank rose its benchmark interest rate by a quarter-point.

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12:30 p.m.

The British pound has fallen sharply, helping U.K. stocks to outperform peers in Europe, after the Bank of England raised interest rates for the first time in a decade.

The pound was 1 percent lower at $1.3115 shortly after the announcement from the central bank that its rate-setting body had voted to raise the benchmark rate by a quarter of a percentage point to 0.5 percent.

David Cheetham, chief market analyst at XTB, said the market is "clearly seeing this as a dovish hike" and that this is a case of "one-and-done."

The pound's drop boosted the FTSE 100 index of leading British shares, which was up 0.3 percent at 7,532. The lower pound is a potential boon to exporting companies.

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12:00 p.m.

The Bank of England has raised its key interest rate for the first time in a decade as it seeks to dampen down inflation largely stoked by last year's Brexit vote.

In a statement Thursday, the bank said its rate-setting body had increased the benchmark rate to 0.50 percent from the record low of 0.25 percent.

Rate-setters were faced with a dilemma during their deliberations. Though inflation is running a full percentage point above their target rate of 2 percent, the British economy has come off the boil since the vote to leave the European Union. There are worries it could be further hobbled if the British government fails to agree on a post-Brexit trade deal with the other 27 EU nations.

Britain is due to leave the EU in March 2019.

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9:15 a.m.

The Bank of England is poised to raise its main interest rate for the first time in a decade to keep a lid on a rise inflation caused by Brexit.

The bank is expected Thursday to lift its main rate by a quarter percentage point from the record low of 0.25 percent. That would be its first hike since July 2007, just before global credit markets started to freeze up ahead of the full-blown global financial crisis.

The main motivation would be to rein in inflation, which is above the target of 2 percent by a full percentage point. Inflation has spiked since the pound fell following last year's vote to leave the European Union. The economy, however, is growing only slowly and a rate hike could hurt it further.