The BoE will remain on its rate hiking path in February as inflation is well above its target and the economy-threatening impact of the omicron strain should be milder than previous variants of the coronavirus, a Reuters poll showed.

The Bank of England was the first major central bank to hike interest rate in December - the first time since the start of the pandemic - surprising markets and many economists who hadn't expected the monetary tightening to begin so soon.

The regulator felt that despite the widespread occurrence of the omicron strain, it was time to act because it saw signs that underlying inflationary pressures could entrench after the initial price surge.

UK consumer prices rose 5.4% year-on-year in December, the Office for National Statistics said on Wednesday. This is the highest inflation rate since March 1992.

Inflation in the UK will peak out in 2Q of 2022 before starting to fade in the third, according to economists polled by Reuters. It will reach the target level of the Bank of England at 2% in the second quarter of next year, the survey showed.

Markets are pricing in an 85% chance that the BoE will raise its key interest rate to 0.50% next month.