For the first time in more than 10 years the Bank of England has raised interest rates.
The Bank is looking to cool surging inflation, which has been sent higher by sharp falls in the pound since the Brexit vote.
Although the rise may not have a major impact on commercial real estate, it will hit variable-rate mortgage owners across the United Kingdom and will likely be the first time many have experienced an increase in their mortgage payments.
"All members agree that any future increases in Bank Rate will be at a gradual pace and to a limited extent", it added, signaling further gradual rises in the future.
Nearly four million households face higher mortgage interest payments after the rise, but it should give savers a modest lift in their returns.
The Bank estimates that nearly two million mortgage holders have not experienced an interest rate rise since taking out a mortgage.
Sterling fell 0.91 per cent against the dollar, and 1.32 per cent against the euro after Threadneedle Street's decision was announced.More news: 37 million fire extinguishers recalled
United Kingdom bond and rates markets reflected traders' skepticism that rates will rise much more in the coming years.
But the Bank also said its forecasts are based on the assumption of a "smooth adjustment" of the United Kingdom economy to Brexit, something that has been thrown into increasing doubt by the failure of the Government to make any substantive progress in its Article 50 divorce negotiations with the European Union.
Howard Archer, chief economic adviser to the EY Item Club consultancy said: "The Bank of England seemingly sees the hike to 0.50% as more likely to be a case of "one and a little more to come" rather than "one and done". "And Brexit-related constraints on investment and labour supply appear to be reinforcing the marked slowdown that has been increasingly evident in recent years in the rate at which the economy can grow without generating inflationary pressures".
"With inflation set to fall next year as the impact of sterling devaluation wanes, the MPC will stop hiking if there are clear signs that the economy is slowing".
The Bank of England is tasked with keeping consumer price inflation at around 2%. If the rate rise goes ahead, this could have a positive impact of the British currency.
Economists said the rise was unlikely to have a big effect on the economy, because rates are still at the lows seen since the financial crisis. Stagnating wage growth, tight household budgets and tough Brexit negotiations are all reasons to believe the BoE will hold fire on further hikes.
Last month's services purchasing managers' index (PMI) produced a better-than-expected result, showing the sector picking up to 53.6 in September, easily above the 50 level that separates growth from contraction.