Hikes could come as early as mid-2022, HSBC has predicted, which would make it the first major central bank to start raising interest rates from its record low of 0.1 percent.
The BOE was not expected to start lifting the bank rate until late 2023 or early 2024 but it is suspected that the fear of rocketing inflation will spur them into action sooner.
The bank slashed interest rates during the pandemic in the hope of encouraging cash-strapped businesses to borrow cheaply and pushing households to spend rather than save.
But now the central bank will be keen to keep a lid on the rising cost of living.
Higher interest rates would come as a welcome shift by long-suffering savers but will be inevitably bad for borrowers.
There are concerns bubbling within the central bank that lifting rates too early could dampen the economic recovery.
However, others argue inflation and rising prices could soon spiral out of control if rates are not raised soon.
The National Institute of Economic and Social Research group, Britain’s oldest independent economic research institute, said inflation could hit 3.9 percent early next year – almost double the Bank of England’s target.
This figure should fall back to two percent the year after the central bank bites the bullet and hikes the rates.
The announcement will come at 12pm today with questions put to the Bank of England governor, Andrew Bailey, at 1pm.
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