Governor of the Bank of England, Sir Mervyn King, will signal on Wednesday that interest rates will remain around their record low until the end of next year at the earliest, the Daily Telegraph reports.
The report said the base rate is projected to remain on hold as the bank uses its quarterly inflation report to cut its forecast for the country's economic activity and "brace for higher-than-expected inflation".
IHS Global Insight chief UK economist told the paper:
"It is odds-on that the new forecasts contained in the report will be the all too familiar and dispiriting mix of reduced growth but higher inflation expectations.
"We expect it to indicate that interest rates are unlikely to rise from the currently level of 0.5% until at least late-2013, and very possibly not until 2014."