The base rate is expected to be increased by a further 0.25% to reach 4.75%, which will be the thirteenth consecutive rate rise. It would the highest rate since 2008 amid the global financial crash.

The Bank of England is resolutely focused on reducing inflation, and is unlikely to move away from its current rate raising cycle.

In the year to April, inflation did fall to 8.7%, while it is a reduction  from the 11.1% peak of last October, it’s still way higher than the Government’s 2% inflation target.

Last week, the Bank of England governor Andrew Bailey told a parliamentary committee that inflation was taking longer than expected to come down. He also said that the labour market was still “very tight”.

Markets have continued to place their bets on a rate hike, which has pushed the two-year Government gilt yield to its highest peak also since 2008.

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Expert view: Rate could go as high as 6%

While there is concensus from the markets and experts that the base rate will rise on Thursday, the question remains by how much and where will it land by the end of 2023 and beyond.

Sanjay Raja, senior economist at Deutsche Bank, said: “We expect the Bank of England to hike bank rate for a
thirteenth consecutive meeting to 4.75%. The odds of a 50bps hike? Despite a run of hawkish data, we think the bar for a more ‘forceful’ hike is high, particularly with bank rate well into restrictive territory.”

The experts at Capital Economics agree on the 0.25% uplift but also believe that the rate will breach 5% in the coming months, eventually climbing to 5.25%.

Ruth Gregory, deputy chief UK economist said: “The recent persistence of inflation leads us to think that the Bank of England will proceed with another 25 basis point rise from 4.50% to 4.75% next Thursday and ultimately raise rates to a peak of 5.25%.

“Meanwhile, given the UK’s longer-lasting inflation problem and shrinking workforce, we think that it will take until late next year for the Bank to cut rates.”

Meanwhile ING revealed that markets are currently pricing six more rate hikes. which the Bank of England would not look to endorse. This would take the base rate up to around 6%.

The bank also says that the Bank of England would not be seeking to cut rates in the near future as inflation data has come in above expectations. It also expects a base rate rise of 0.25% to be announced this week.

James Smith, developed markets economist at ING, said: “After some unwelcome inflation and wage data, markets now expect the Bank of England to take rates close to 6% over the coming months.

“That equates to almost six additional rate hikes and is very close to the highs we saw in the midst of the ‘mini budget’ crisis last year.”

In slightly better news, the UK is on course to swerve a recession that was much expected by the Bank of England at the beginning of this year.

Recently, the International Monetary Fund said that the UK economy would grow by 0.4% this year.

This was in stark contrast to the 0.3% contraction that it forecast back in April.