LONDON: The Bank of England is set to hike its economic growth forecasts Thursday as the UK gradually exits lockdown restrictions thanks to the country's rollout of Covid-19 vaccines.

It comes as the BoE is widely expected to leave its key interest rate at a record-low 0.1 percent and maintain its stimulus programme pumping vast sums around the economy.

"It looks highly likely that the Bank of England will significantly revise up its GDP growth forecast for the UK economy in 2021 ... and improve its unemployment projections," noted EY economist Howard Archer.

The BoE currently forecasts the UK economy to grow by 5.0 percent this year and by 7.25 percent in 2022.

It has also predicted unemployment to average 6.5 percent this year.

At the same time investors are concerned that the reopening of economies and huge government stimulus programmes worldwide will hike inflation, risking higher interest rates down the line.

But despite Britain's annual inflation rate accelerating to 0.7 percent in March partly owing to rebounding oil prices, it remains far below the BoE's 2.0-percent target.