The Bank of England is preparing to unveil the biggest hike in interest rates for 33 years this week as the central bank continues its efforts to curb inflation.

Most economists think the Monetary Policy Committee (MPC) is likely to rise interest rates by 0.75 percentage points to 3% at the meeting on Thursday.

It will be the eighth consecutive jump in interest rates by the Bank but will represent the biggest increase since 1989.

Earlier this month, markets had predicted the interest rate increase could be as much as 1% but sentiment has calmed somewhat after the change of chancellor and prime minister.

It is also worth noting that markets have also witnessed a decreased appetite for large hikes globally, with the Bank of Canada increasing its interest rate by 0.5%, below the 0.75% hike which had been widely predicted.

Analysts at Deutsche Bank have said they expect the Bank of England to opt for a 0.75 percentage point rise with a split vote.

The Bank will also confirm its inflation expectations for the longer term, which are due to show that the cost of living will be much higher than the central bank’s 2% target next year.

Interest rate hike could be lower than expected as markets rally