But the BoE is still likely to hold off on a rate hike due to Omicron fears. The bank faces the looming threat of stagflation and warnings from the IMF. The BoE’s Monetary Policy Committee will make its interest rates decision on Thursday, but has previously indicated it will hold off on hiking - opting instead to collect more data on the economic impact of the Omicron variant of Covid-19.

The IMF expects UK inflation could hit 5.5 percent in spring - well above the bank’s 2 percent target – and it told the BoE to beware of ‘inaction bias’ when deciding whether to finally bring interest rates above their current rock-bottom level of 0.1 percent.

That level was introduced as an emergency measure at the start of the Covid crisis before the UK's initial lockdown - and a much clearer picture now exists of how Britain has weathered the storm and where the current challenges are.

Meanwhile, British households and businesses face faster than expected price rises as inflation continues to beat forecasts, ONS figures showed. As economic growth slows, BoE now faces rising fears of stagflation and a stark warning from the International Monetary Fund, which recently urged the BoE and the Treasury to get a grip on the soaring cost of living.