Interest rates are set to rise to a fresh 15-year high when rate-setters meet later this week.
Investors are betting on a 0.25 percentage point rise to 5.25%, following better than expected inflation figures for June, when CPI inflation dropped to 7.9%.
However, a rise in the base rate to 5.5% is still likely, economists said, as the bank struggles to get a grip on inflation.
The Monetary Policy Committee said in June that it would look closely at the tightness of labour market conditions, the behaviour of wage growth and at services price inflation for signs of “more persistent” inflationary measures.
So far the evidence has been mixed.
The data “could be deployed to make the case for either a 25 basis point or a 50 basis point [increase],” said Cathal Kennedy, senior UK economist at RBC Capital Markets.
