Investors are betting that the Bank of England (BoE) will raise interest rates to their highest level since the global financial crisis within the next year, with the first move potentially coming this week as policymakers seek to contain surging inflation.

A rate increase would put the BoE in line with a global shift towards tighter monetary policy, with the US Federal Reserve expected to start tapering its asset purchase programme this week. Canada’s central bank ended its bond-buying programme abruptly last week and signalled it too could raise interest rates soon to combat rising price pressures.

Market pricing suggests UK interest rates are set to rise above 1% by the end of 2022, reaching their highest level since 2009, with an initial rise of 15 basis points on Thursday taking the benchmark rate to 0.25%. Almost half of UK households also expect borrowing costs to rise within the next three months, according to a survey by the research group IHS Markit.

Andrew Bailey, the BoE governor, fuelled market expectations when he told a panel discussion a fortnight ago that policymakers would “have to act” if the surge in energy prices led people to expect higher inflation in the medium term - although he gave no indication of timing.