On the heels of another disastrous inflation report, the Bank of England reescalated its hiking campaign.

A 13th consecutive increase on Thursday was a foregone conclusion, it was just a matter of whether policymakers would view the unequivocally poor inflation readings as a sign that a more forceful response was warranted. The answer, as it turns out, was “Yes.”

Thursday’s 50bps move followed a two-meeting step-down to quarter-point increments. Bank rate is now 5%.

The vote was 7-2. You don’t need me to tell you who the dissents were (Swati Dhingra and Silvana Tenreyro, obviously).

Headed into a pivotal week for the UK economy, market pricing suggested the terminal rate for the BoE could be as high as 6%, implying a half-dozen additional 25bps moves. Those expectations firmed on Wednesday, following inflation data for May which was… well, it was just awful, frankly. Core price growth is running 7.1% and services inflation 7.4%. The latter is “0.5 percentage points stronger than expected at the time of the May Policy Report,” the BoE helpfully noted on Thursday.

The forward guidance skewed hawkish. The statement acknowledged that “second-round effects in domestic price and wage developments” initially triggered by exogenous shocks “are likely to take longer to unwind than they did to emerge.” It’s fair to suggest that not all central bankers understood that a year or two ago, even as they understand it all too well now.

“There has been significant upside news in recent data that indicates more persistence in the inflation process, against the background of a tight labor market and continued resilience in demand,” the BoE went on. In other words: Even as the bank’s projections still see inflation falling quickly and “significantly” by year-end thanks in no small part to developments in energy prices, the BoE recognizes they have a serious problem on their hands, and a meaningful share of the inflation impulse is now “coming from inside the house,” so to speak.

The MPC explicitly called out labor market tightness and wage growth, and the nexus between those phenomena and services inflation. Recall that nominal regular pay growth ran above 7% in the three months to April. “If there were to be evidence of more persistent pressures, then further tightening in monetary policy would be required,” the bank said.

“It was always quite unlikely that the Bank would pre-commit to any particular course, or push back against market pricing, given the recent tendency of inflation to overshoot expectations,” ING’s James Smith said, following the decision. “BoE policymakers are always keen to stress they don’t take decisions on future rate hikes in advance [but] they will be acutely aware that investors will read the decision to hike by 50bps today as an implicit endorsement of market pricing for the rest of this year.”

6% here we come!