Britain braces for another increase in interest rates.

In Britain, consumer prices are rising at their fastest pace in three decades, prompting investors to prepare for something that hasn’t happened in more than 17 years: back-to-back interest rate increases by the Bank of England.

Markets are expecting a 25-basis-point increase to 0.5 percent when the central bank announces its latest policy decision later on Thursday. It comes after the annual inflation rate rose to 5.4 percent in December, the highest since 1992 and far exceeding the central bank’s target of 2 percent.

The fear is that businesses and consumers will begin to assume these cost increases will continue, causing workers to demand higher wages in response and businesses to continue to raise their prices, fueling a cycle that keeps inflation rates higher for longer.

“What monetary policy needs to do now is to temper the 2022 expectations for wage and price increases to prevent them from being embedded in the decision-making of firms and consumers,” Catherine Mann, a member of the bank’s rate-setting committee, said in January. She voted with seven others on the nine-person committee to raise rates at their last meeting, in December. The central bank needs to “lean against” expectations that could keep inflation rates higher than previously predicted throughout this year, she added.

Inflation isn’t expected to peak until April, after a government cap on gas and electricity bills is raised. Already, inflation has prompted concerns about a cost-of-living crisis in Britain, as the budgets of households, particularly low-income ones, are squeezed by the most rapid food price inflation in a decade, higher energy bills and other rising costs.

“There are some concerns about the hit to disposable income from the surge in inflation coming in the spring but this might just redouble the committee’s resolve to bring it back under control,” Brian Hilliard, the chief U.K. economist at Société Générale, wrote in a note to clients. He predicted that the bank would announce a rate increase on Thursday, and again in May and August.

Inflation is quickening in the United States and Europe as well. Last week, the Federal Reserve has signaled it will begin raising rates soon, possibly as soon as next month. Later on Thursday, the European Central Bank will announce its latest policy decision after inflation in the eurozone rose to 5.1 percent in January. Economists had expected the rate to decline.

The Bank of England on Thursday will also publish updated economic and inflation forecasts. In December, the bank said that the quickly spreading Omicron variant, government measures to control the virus and voluntary social distancing would slow the recovery in December and early this year.

Still, policymakers and investors have been more keenly focused on the path of inflation. As recent readings have beat expectations, markets have priced in about four more increases this year. But the Bank of England has surprised market participants twice recently — in November, when it didn’t raise interest rates, and in December, when it did.

The 15-basis-point increase to 0.25 percent in December was the first in three and a half years. That came one day after the central bank completed its latest bond-buying program, bringing the total stock of government and corporate bonds it holds to £895 billion.