The Bank of England is expected to raise interest rates to their highest level since 2009 on Thursday, as the central bank seeks to strike a balance between tackling record inflation and not taking action that would exacerbate the UK economic slowdown.
Increasing rates from 0.75 per cent to 1 per cent would mean the BoE hits a self imposed threshold to reveal next steps in its plan to reduce billions of pounds worth of assets built up over 12 years of quantitative easing following the financial crisis.
Financial markets were expecting the BoE Monetary Policy Committee to raise rates by half a percentage point this week, but have shown signs of revising their calculations down in recent days, with most economists now predicting a 0.25 percentage point increase.