The Bank of England's (BOE's) monetary policy committee didn't miss an opportunity to surprise with a triply hawkish move on Thursday. Not only did it lift the bank rate to 0.5 percent, as was widely expected, but four of the nine members voted for a double rate hike of 50 basis points (bps).

The pound rose initially against the euro but swung weaker after a more hawkish European Central Bank (ECB) meeting. Two-year gilt yields jumped 16 bps with a slightly smaller gain further out the curve. Sterling money markets are fully pricing in a 25 bps hike at both of the next two meetings, projecting official rates as high as 1.5 percent by yearend, triple their current level.

This was a game-changer of a meeting, with the BOE's active reversal of monetary stimulus amounting to a tacit admission that it was left too long to curtail the secondary effects of rampant inflation seeping into the wider economy. The BOE now expects inflation to peak at 7.25 percent in April, with only a gradual return toward its 2 percent target by the end of its three-year horizon. Its forecasting skills have been called seriously into question with these repeated upward revisions.