The Bank of England will likely hold interest rates at their record lows on Thursday as policymakers balance decade-high inflation against the economic fallout of the Covid-19 Omicron variant.

The BoE’s monetary policy committee will announce its latest decision at 1200 GMT, in a whirlwind 24 hours that includes interest rate calls from both the European Central Bank and the US Federal Reserve.

Major central banks remain on standby should the Omicron coronavirus variant spark new lockdowns and shutter swathes of the world economy once more.

The institutions are however also grappling with red hot inflation fuelled by runaway energy prices, the global supply crunch and resurgent commodity markets.

Economists predict a close call for the Bank of England after official data revealed Wednesday that UK inflation rocketed to 5.1 percent in November.

“With inflation reaching a 10-year high, the Bank of England will be under pressure to lay out their plans even if they do hold off on raising rates tomorrow,” said IG analyst Joshua Mahony.

“Caught between constantly rising inflation and the prospect of a dramatic explosion in Omicron cases, the UK economic picture looks more unstable than ever.”

Omicron, which emerged late last month, forced Britain to re-impose coronavirus restrictions — including guidance to work from home and mandatory Covid passes.

The BoE’s main job is to use monetary policy as a tool to keep the inflation rate close to a 2.0-percent target in order to preserve the value of money.

November however marked the highest inflation since September 2011, with surging fuel costs pushing the rate further above target.

An interest rate hike from the current record-low 0.10 percent would mark the first increase in more than three years, as the bank seeks to counter inflation.

However, the BoE “will look to hold off this time around” in the hope that Omicron infections will fall by the time of its next scheduled gathering in February, Mahony added.

After countries emerged from pandemic lockdowns earlier this year, companies struggled to meet demand for goods, energy and services, sending prices soaring.

“Inflation is close to being further above the target than at any point since the UK started targeting inflation in October 1992,” added economist Paul Dales at research consultancy Capital Economics.

“This makes tomorrow’s interest rate decision look closer, but on balance we think the Bank of England is more likely to keep rates at 0.10 percent until it learns more about the Omicron situation.”

The UK economy was already struggling prior to Omicron, growing by an anaemic 0.1 percent in October, down from 0.6 percent in September.

Prime Minister Boris Johnson has warned of a looming “tidal wave” of Omicron that could overwhelm hospitals.

BoE policymakers will however be mindful of recent upbeat UK unemployment data, despite the end of a government scheme to keep millions of private-sector workers in their roles during the pandemic.

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