The European Central Bank made no change to its key lending rate Thursday, but the Bank of England unexpectedly raised its own benchmark by 25 basis points.

After hiking rates to 5.25%, the Bank of England said U.K. output continues to rise at a firm pace, domestic demand has grown steadily and credit and broad money growth remain rapid.

The central bank said national consumer price index inflation rose 2.7% in November, above its target of 2%.

"It is likely that inflation will rise further above the target in the near term, but then fall back as energy and import price inflation abate," the bank said in a statement. "Relative to the November inflation report, the risks to inflation now appear more to the upside."

The bank last lifted rates by a quarter-point in November.

On the continent, the ECB kept its main rate at 3.5% as officials there wait for additional data on the pace of inflation in the eurozone.

Following the meetings of the two banks, the dollar fell against both the euro and the British pound. Lately, the euro cost $1.2988, and the pound was going for $1.9513.

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