Interest rates expected to be held at 0.25% after inflation reaches 2.9%
The Bank of England is expected to keep interest rates on hold on Thursday despite mounting pressure to take action as households suffer amid soaring inflation.
This month's decision comes in the wake of official figures showing inflation hit 2.9% in May - its highest level in nearly four years and far higher than expected.
The figures laid bare the squeeze on household finances as inflation outstrips wage growth, with CPI having been sent soaring as the Brexit-hit pound has pushed up the price of imported goods and energy.
But economists believe the Monetary Policy Committee (MPC) will keep rates at 0.25% for some time as it continues to look through above-target inflation for the good of the economy.
The minutes of the MPC's rates meeting will be watched closely for the Bank's latest thinking on prospects for inflation and the pound following the shock election result last week.
After the sharp inflation hike in May, economists now believe the Consumer Prices Index (CPI) will rise above 3% over the summer.
This is far higher than the Government's 2% target and suggests the Bank may need to tweak its previous prediction that CPI will peak at close to 3% this year.
Bank governor Mark Carney warned last month of a ''challenging time for British households'' in 2017 as Brexit-fuelled inflation will eat into finances.
There has also been gloom over the economy, with growth slowing more than expected to 0.2% in the first quarter.
This was at odds with the Bank's predictions for growth of 0.4% between January and March, although the latest surveys from the main sectors suggest a slight pick-up in the second quarter.
Philip Shaw, at Investec Economics, said policymakers will keep a close eye on wages as they balance the needs of the economy against surging inflation.
The latest jobs data released on Wednesday showed average earnings adjusted to account for the impact of inflation fell by 0.6% year on year in the three months to April.
Mr Shaw said: "What matters more for medium-term inflation prospects, and therefore for interest rate policy in the meantime, is the response of pay growth."
"Without evidence of mounting pay pressures, we still consider it unlikely that the MPC will raise rates before 2019," he added.
