The Bank of England has voted to raise interest rates by a quarter of a percentage point to 5.5%.
The increase, the first since February, takes the cost of borrowing to its highest level since 2001.
Analysts had widely expected the rise as the Bank battles to rein in inflation and cool consumer spending.
Business and employers groups accepted that the latest rise was “necessary”, but added caution was needed in future so as not to slow UK growth too much.
“The MPC (Monetary Policy Committee) has to be firm. But it is important not to overreact to transitory developments,” the British Chambers of Commerce (BCC) said.
UK interest rates raised to 5.5%