Sterling was volatile, the Swiss franc fell and the Norwegian crown surged on Thursday after Bank of England (BoE), the Swiss National Bank (SNB) and Norges Bank all hiked their benchmark interest rates.

The BoE's Monetary Policy Committee (MPC) voted 7-2 to raise its main interest rate to 5% from 4.5%, its highest since 2008 and its largest rate increase since February.

After inflation data held at 8.7% in May, defying market expectations and making it the highest of any major economy, investors were split on how big the new BoE hike would be.

Economists polled by Reuters last week were unanimous that the BoE would raise rates to 4.75%, their highest since 2008, from 4.5%.

Sterling initially rose to a day high of $1.2845 after the rate hike, but at 1200 GMT, it flattened on the day against the dollar at $1.2775 as investors worried about growth prospects in the UK.

Against the euro , it fell to an almost three-week low, last down 0.1% on the day at 86.07 pence.

The Swiss franc fell after the Swiss National Bank (SNB) hiked its benchmark interest rate by 25 basis points to 1.75%, defying some market expectations of a bigger increase.

Despite an easing in Swiss inflation, currently the lowest among G10 economies at 2.2%, SNB Chairman Thomas Jordan recently repeated his readiness to raise rates, encouraging markets to expect a 50-bps hike.

However, economists polled by Reuters had expected the SNB to hike rates by 25 bps.

The Swiss franc fell 0.15% to 0.8942 against the dollar, moving away from a six-week high it touched last week.

Source : Reuters