UK central bank hikes rates like Fed amid financial turmoil

The Bank of England is focusing on inflation, announcing an 11th consecutive interest rate increase despite concerns about the economic fallout from troubles in the global financial system.

Britain's central bank boosted its key rate by a quarter-percentage point to 4.25 per cent on Thursday, a day after the US Federal Reserve approved a similar move to tame inflation that is crimping household budgets and slowing economic growth.

The decision came after the UK statistics agency surprised policymakers on Wednesday by reporting that inflation accelerated to 10.4 per cent 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 collapse of two US banks and the ensuing turmoil at Switzerland's Credit Suisse.