The Bank of England has raised interest rates by a quarter of a percentage point to 5.5% because of concerns about inflation.
The move has put the UK's base rate at its highest level since 2001.
Even though rates had been left unchanged for two months, economists have been saying for weeks the Bank would enforce a change, although a jump to 5.75% was mooted by some.
A spokesman for the Bank says: "In the United Kingdom, output growth has remained firm.
"Business investment has been stronger than expected and, although indicators of consumer spending have been volatile, the underlying picture is one of steady growth. Credit and broad money continue to grow rapidly. The pace of expansion of the international economy remains robust."
The rise has been met with scepticism by some. Simon Ward, chief economist at New Star Asset Management, says: “The Bank needs to beware of overkill. The three earlier hikes coupled with a 5% rise in the exchange rate over the last year have tightened monetary conditions significantly.
“There are signs that growth is beginning to slow, while inflation news is set to improve. A move beyond 5.5% would have risked unnecessary economic weakness in 2008.”
The higher interest rate means homeowners with a mortgage of £100,000 will now see monthly repayments rise by about £16 on average.
Research from online mortgage company mform.co.uk suggests the situation could become desperate for some borrowers.
It says more than one in seven borrowers - around 6.5 million people - could struggle as a result of the interest rate hike.
Eamonn Rice, chief executive of mform.co.uk, says: “This rise has taken interest rates to their highest level for six years. And there is no guarantee that this rise will be the last this year.
“Borrowers have got used to low interest rates and many haven’t adjusted to the fact that we may now be entering a period of higher rates.
“Anyone who hasn’t acted in the face of the three interest rate rises since last August should start now,” he warns.
Not all analysts predicted the rise. They pointed to the fact the Bank was due to release its quarterly inflation report next week and might decide to hold off on making changes until it had been published.
However, this assertion was proved unfounded.
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