Savers are always on the lookout for the best interest rates and the UK seems like a good bet at the moment. In recent months, the pound has climbed in value against the euro and the dollar as economists speculate that UK interest rates will remain at 5.25% for longer than previously expected.

While the odds of a cut in borrowing have shortened, with a narrow majority of City analysts expecting a reduction, few outside the Square Mile believe a change is imminent.

If anything, Bank officials will send sterling to even greater heights when they signal, as seems likely, that a cut remains some way off.

Suren Thiru, economics director of accountancy body the ICAEW, says he still expects the Bank to lower interest rates to 4.75% by the end of the year, but “an August rate cut is looking less likely”.

Charlie Bean, an economist at the London School of Economics and a former deputy governor of the Bank, says he will be surprised if the cost of borrowing was reduced this week.

In March, the Bank’s nine-member monetary policy committee (MPC) said falling inflation and a weak outlook for the economy meant it was on course to lower interest rates. The committee signalled three rate cuts this year and more to come in 2025.

Then came figures showing a strong bounce back from last year’s mild recession. According to the latest S&P Global survey of the business sector, manufacturers and services companies are winning new orders and growing in confidence about the outlook for employment and profits.

Adding to the sense that the economy was doing fine without lower borrowing costs, official figures for May and June revealed wages growth remained above 5.5% and firms that were laying off workers last year had begun to hire again.

The Bank has a mandate from parliament to maintain inflation at about 2% over the longer term. And while the consumer prices index was 2% in May and June, there was concern that wage pressures would reverse the trend.

Core inflation, which excludes volatile items such as fuel and food, is stuck above 3%. Worse, the services inflation figure, which track what businesses charge each, other remains persistently above 5%.

Stephen Millard, deputy director of the National Institute of Economic and Social Research, says: “The question is whether we are seeing enough evidence to show inflation is going to stay low.” He believes the Bank needs more time to assess the economic situation before beginning to reverse the 14 consecutive rate rises that took place between December 2021 and August last year.

Bean says if he was still on the MPC, he would want more evidence that wages were going to fall and that services companies, which have passed on most of their cost increases to customers over the past two years, would stop doing so.

The MPC publishes its latest quarterly assessment of the economic outlook on Thursday and is expected to revise upwards its growth forecast for this year and next. A rise from low to moderate growth is welcome news, but is likely to disguise a deteriorating situation in the labour market, which will be characterised by rising unemployment and, about six months from now, falling wages growth.

While the overall economy is growing, there are large pockets of industry and the services sector suffering from financial distress, partly as a result of high interest bills. Consumers are also reluctant to spend and businesses are shy of making investment decisions while there is uncertainty about the path of interest rates.

Thiru accuses of the Bank of “dithering” when the broad picture shows the UK’s private sector is largely stagnant and desperately in need of lower borrowing costs.

The European Central Bank has already cut rates and the US Federal Reserve is poised to follow suit.

Thiru is among many analysts who argue that the UK badly needs a boost from lower borrowing costs. “There is a pressing need to cut rates given the level of stagnation in the economy,” he says.

At the last MPC meeting, only two members voted for a cut. With at least four members known to be reluctant to usher in cheaper money, the power falls to governor Andrew Bailey and the other two floating voters.

If Bailey joins “the hawkish four”, judging a further delay necessary, savers will cheer. Those who have accumulated debts will need to wait.