BANK OF ENGLAND RAISES KEY INTEREST RATE BY 0.75 POINT

Hike takes rate to highest level since November 2008 and just after few weeks of the Queen's Demise.

LONDON—The Bank of England raised its key interest rate by 0.75 percentage point on Thursday, its largest rise since 1989, as it fights a surge in inflation from rising energy prices even as the U.K. economy slides into an expected recession.

''The Bank of England enacted its eighth consecutive interest-rate increase.''

The central bank raised its benchmark lending rate to 3% from 2.25%, taking it to the highest level since November 2008. Higher borrowing costs will hurt an already weak economy as consumers brace for a difficult winter of falling real incomes and rising prices.

Video Courtesy ; ABC NEWS