The Bank of England increased its benchmark interest rate by 50 basis points on Thursday.

The Bank of England increased its benchmark interest rate by 50 basis points on Thursday, indicating that additional tightening will be required to control inflation.

The Monetary Policy Committee approved the 0.5% increase by a 6-3 vote, bringing the bank rate to that level.

The increase slows down from the 75-basis point increase in November.

The annual increase in the U.K. consumer price index dropped to 10.7% in November after reaching a 41-year high in October, according to new data released Wednesday.

The slowdown coincided with indications that inflation may have peaked in other significant economies, including the U.S. and Germany, even though it is still uncomfortably high and much beyond the Bank of England's 2% objective.

The central bank is working to bring inflation back toward its goal while simultaneously keeping an eye on the economy, which is deteriorating due to a number of distinct local pressures as well as foreign headwinds.

This was confirmed by the most recent U.K. labour market statistics, which were released earlier this week and showed an increase in both wage growth and unemployment, while rates of economic inactivity and long-term illness also remained historically high.

(Sources: CNBC.com)