The Bank of England (BoE) likely is expected to increase interest rates by a further 0.25% in May, according to a Reuters poll of economists.

Despite several rate hikes since December 2021, UK inflation remains extremely high, consistently running at over five times the BoE’s 2% target.

At the meeting in March, the BoE said there were signs inflation, last reported at 10.4% in February, was peaking and would probably fall rapidly, leading to speculation that there would be a pause. However, it kept the door open for more tightening if needed.

Just over half of economists, 33 of 61, expected Bank Rate to rise 25 basis points to 4.5% when the next Monetary Policy Committee meeting takes place on 11 May. Three of those 33 expected one more in June.

The remaining 28 polled April 11-17 said rates are on hold. The poll results are in line with market pricing.

“The Bank of England will want to see clear evidence inflation is falling before pausing their hiking efforts. But we do think the days of tightening are limited and we are near the end of that cycle as inflation pressures ease,” said Ellie Henderson at Investec.

One of the main reasons analysts see policymakers struggling over whether to pause or hike is the economy is on the brink of recession, despite recently performing slightly better than expected.

“May’s MPC decision is on a knife-edge. While we continue to see a pause as more likely, the risks remain skewed in a hawkish direction,” wrote economists at Citi. “The key question here is whether February’s upside surprise to core inflation in particular reflected idiosyncratic effects, or something more troubling.”