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The Bank of England is expected to keep interest rates at the same level on Thursday as it continues to wait for further evidence that inflation is falling.

Financial markets are predicting that the base rate will remain unchanged at 5.25 per cent for the fifth consecutive time.

It will be welcome relief for homeowners who sufferef 14 consecutive increases in 2022 and the first half of 2023 from 0.1 per cent up to the current rate, prompting mortgage rates to rise sharply.

The BoE hiked the rate so quickly in order to curb inflation which skyrocketed as high as 11 per cent in 2022. The BoE’s target is to get inflation down to 2 per cent.

Members of the BoE’s Monetary Policy Committee (MPC), who make the decision on rates, will be keeping a keen eye on Wednesday’s inflation figure, with it widely expected to fall to 3.5 per cent, down from 4 per cent.

Last month, Andrew Bailey, the BoE’s governor, said the 2 per cent target it likely to be met in the spring and he wanted to see further sustained progress on inflation in the services sector, pay increases and the labour market, before reducing interest rates.

He told the Treasury Select Committee: “We’ve seen, I think, encouraging signs on them. So, services inflation is still above 6%, there are some signs of it coming down now,” Mr Bailey said.

“I think some signs that pay is now adjusting down towards the lower headline inflation, which is what I’d expect to see.

“The quantity side of the labour market remains tight, there’s no question about that. But it’s the progress of those three things.

“We don’t need inflation to come back to target before we cut interest rates, I must be very clear on that, that’s not necessary.

“We’ll be looking for sustained progress on those things to reach that judgment about how long this period of restrictive policy needs to be.”

Despite the falling inflation, experts are expecting that only one of the Bank’s nine-strong rates setting committee to vote for a cut on Thursday.

Sandra Horsfield, an economist at Investec, said: “The Monetary Policy Committee (MPC) of the Bank of England will announce its next policy decision next Thursday at midday.

“The decision itself looks likely to be straightforward: at the time of writing, the market prices in only a negligible chance of a policy rate change next week. We concur, expecting a steady Bank rate of 5.25%.

“Much as at the last meeting though, we think clear divergences of preferences within the MPC will persist: as in February (which had been the first such instance since August 2008), we expect a three-way split in the vote, with one member voting for an immediate rate cut (Swati Dhingra), probably still two for another hike (Catherine Mann and Jonathan Haskel) and the clear majority opting for no change.”

Sarah Coles, personal finance expert at Hargreaves Lansdown, told The Sun: “At the end of last year, the markets were fairly convinced we would get a Bank of England rate cut in May or June, but sticky inflation at the start of the year forced them to re-think.”

“At this stage, May is looking highly unlikely, June is in the balance, and the market is increasingly expecting an August rate cut.”