Economists believe a 0.25 percentage point rise – to 5.25% – is the most likely increase to be announced at middal

However, the Bank’s Monetary Policy Committee (MPC) defied expectations last time when they hiked the rate by a bigger than expected 0.5 percentage points in June. There are some who think that could happen again.

Governor Andrew Bailey has said that increases will help bring down high inflation in the UK to the Bank’s target of 2% – although some critics are not convinced it is the right strategy.

Rising interest rates mean bigger borrowing costs – including larger monthly mortgage payments for many homeowners, which can have a knock-on effect of higher rents for tenants.

But, in theory, they should also result in much better rates for savers. However, concerns have been raised that many banks are not fully passing on such benefits to customers.

The Bank of England’s “shock” hike in the interest rate in June came after inflation did not fall as predicted, and instead remained at 8.7% in the year up to May.

However, inflation then dropped by more than expected to 7.9% the following month.

The last time the bank base rate stood at 5.25% was 15 years ago in March 2008.

The MPC’s announcement will be closely watched for its impact on the housing market – and the wider economy, amid fears that rising rates could help push the UK into recession.

The Nationwide Building Society said earlier this week that property values declined by 3.8% in July, the biggest drop in 14 years. It blamed dampened demand on stretched affordability for mortgages.

According to figures from Moneyfacts, the average two-year fixed residential mortgage rate was 6.85% on Monday and Tuesday.

Over the same period, the average five-year fixed residential mortgage rate was 6.37%, the financial information company said.

A survey of economists found they believe there is a 64% probability of the interest rate being increased by 0.25 percentage points on Thursday, and a 36% chance of a 0.50 percentage points rise.

But Joseph Calnan, from payments provider Moneycorp, said it was “anyone’s guess” what the MPC would do.

He said: “For the first time in a long time, we’re unsure what to expect at this next meeting. We could see a 50 bps [basis points] hike, a 25 bps hike, or even no change at all given [inflation] finally eased off in June after a stubborn 11 months.”