BoE to announce June rate decision at 1100 GMT
Economists see rates rising to 4.75 from 4.5
Markets see high chance of bigger move to 5
Inflation at 8.7 has overshot BoE forecasts

LONDON, June 22 Reuters The Bank of England is set to raise interest rates for a 13th time in a row on Thursday, a day after inflation data came in higher than expected again, with investors split on just how big the new hike will be.

Economists polled by Reuters last week were unanimous that the BoE would raise rates to 4.75, their highest since 2008, from 4.5.

But after inflation held at 8.7 in May, financial markets priced in a nearly 50 chance that the BoE would opt for a bigger move and raise rates by half a percentage point.

I think it39;s a very finely balanced decision, said Tomasz Wieladek, chief European economist at U.S investment firm T. Rowe Price, who predicts at least three of the Monetary Policy Committee39;s nine members will vote for a halfpoint hike.

Britain39;s economy, which has been hit by the shock of Brexit as well as the COVID19 pandemic and the surge in gas prices caused by Russia39;s invasion of Ukraine, has dodged a widely expected recession so far in 2023 though growth looks set to be a minimal 0.25 this year, according to the BoE39;s forecasts.

Unlike most other big rich economies, output has barely recovered to prepandemic levels. However, two inflation readings since the BoE39;s last rate hike in May have both been higher than expected, raising fears…