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Bank of England Governor Mark Carney speaks following decision to hike rates

Inflation outlook concerns us: BOE's Carney on raising rates

Governor Mark Carney gave a speech about the central bank's decision to raise interest rates for the first time in more than a decade.

Investors and analysts ; markets priced in a 90 percent possibility of a hike prior to the decision.

In September, the U.K. central bank said a rate hike was likely to be needed in

Rate-setters voted 7-2 in favor of hiking the benchmark rate to 0.5 percent from 0.25 percent.

"It isn't so much where inflation is now but where it is going that concerns us," Carney said at a news conference following the announcement.

Bank of England rate hike decision no surprise, strategist says

In one of the most closely watched interest rate decisions since the financial crisis, the bank said it projected "very gradual" further increases over the next three years.

Carney stressed that rates would "gently" rise as inflation eases in the foreseeable future.

The central bank expects the inflation rate to have peaked at 3.2 percent in October — and will be at 3 percent for the year as a whole. The bank had previously said that inflation would be 2.8 percent for 2017.

The British pound fell sharply against the U.S. dollar following the announcement.

UK participating less in global upswing: BOE's Carney on the world economy