The Bank of England is expected to hold its key interest rate unchanged on Thursday but some analysts are not ruling out a surprise cut ahead of the UK government's annual budget.

Most analysts see the BoE keeping its main borrowing cost at 4.0 percent following a regular meeting, as British inflation stays well above the central bank's target.

However, "a spate of weak economic data... means a surprise cut cannot be ruled out", noted Kathleen Brooks, research director at XTB trading group.

Focus will also be on the BoE's latest forecasts for UK inflation and economic output, around three weeks before Prime Minister Keir Starmer's Labour administration presents the budget.

A cut to interest rates could ease pressure on the government after finance minister Rachel Reeves on Tuesday pave

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