The Bank of England (BoE) raised interest rates by the most in 27 years on Thursday in an attempt to smother surging inflation on track to top 13 percent, even as it warned a long recession is coming.

Reeling from a surge in energy prices after Russia's invasion of Ukraine, the BoE's rate-setters voted 8-1 for a half percentage-point rise in Bank Rate to 1.75 percent, its highest since late 2008.

The big hike had been expected by most economists in a Reuters poll as central banks around the world scramble to contain soaring prices.

The sterling fell as the BoE said Britain would enter a recession at the end of 2022 and not emerge until early 2024.

Governor Andrew Bailey said economic uncertainty was exceptionally high and that all options are open. "Returning inflation to the 2 percent target remains our absolute priority," he said. "There are no ifs or buts about that."

As well as surging energy costs, Britain is also adjusting to Brexit and a political leadership change. The BoE said Britain was facing its biggest slump in living standards since records began in the 1960s.

On Wednesday, the National Institute of Economic and Social Research, a think tank, said more than a million households would soon have to choose between heating and buying enough food.

Bailey said he had "huge sympathy" for households facing rising borrowing costs but "I'm afraid the alternative is even worse, in terms of persistent inflation."

Feedback from business leaders and the BoE's own surveys showed inflation pressure building in the labor market because of a severe shortage of job candidates, he said.

The favorite to become the next prime minister, Foreign Secretary Liz Truss, has pledged big tax cuts. Many economists say that would fuel inflation and push up rates further.

Truss also wants to review the BoE's inflation-fighting mandate.

Bailey declined to comment on the race for Downing Street, or the criticisms of the BoE from Truss and her supporters. But he noted that British inflation had averaged around 2 percent over the 25 years since the BoE gained operational independence, "Certainly not the case for all central banks."

Truss responded to the BoE's gloomy forecasts by saying she would immediately announce an emergency tax-and-spending plan if she becomes prime minister.

(With input from Reuters)