British Banks Boost Basic Loan Rates to 9%

LONDON —  Britain’s biggest banks hiked their base lending rates by half a percentage point to 9% on Monday after the Bank of England raised one of its money market dealing rates to cool an overheating economy.

News of the rate hike surprised the London stock market and punctured an early rally. “I don’t think anyone was even remotely prepared for what happened today,” a broker said.

But others noted that Bank of England Governor Robin Leigh-Pemberton last week cautioned that interest rates may have to rise to contain inflationary pressures in Britain.