The Bank of England is expected to release its quarterly inflation report tomorrow and the expectations are that, for the fourth time in a row, the BoE will be revising up its inflation forecast while maintaining a commitment to low interest rates.

As well as raising its inflation forecast it is also expected that the BoE will revise down its forecast for GDP growth.

Assuming that the upward revision of inflation is not too sharp, the report could signal that the BoE is even more dovish about raising interest rates from the record low of 0.5 per cent than it already appears to be.

A note from Capital Economics said, ahead of the report, "We doubt that the Report will go so far as to suggest that no rate rises are required. Indeed, we have always said that the main "danger months" for a rise in interest rates would be May and August.

"Rates might yet rise once, or even twice. But that will be it. Still more likely in our view is that they don't rise at all."