INTEREST rates now are more likely to peak at around 6.0 per cent than 5.0 per cent, warn analysts.

Bank of England forecasts that rates may peak at 5.0-5.25 per cent may be too optimistic, believes Lombard Street Research.

"So far in this tightening cycle we have seen five interest rate rises (totalling 1.25 per cent) over a 10-month period," said LSR's Stewart Robertson.

"The Bank of England has given the clear impression that it now believes rates are close to the peak for the current cycle.

"A further rise of 25 basis points is probably pencilled in for November, and then there is - it seems - a chance of a final hike some time in the first half of next year.

"If that is what happens, we would have seen an overall tightening of 1.75 per cent over an elapsed time of 16 months."

LSR's predictions are based on nine "significant tightening cycles" in the economy over the past 40 years.

Tomorrow the Bank of England's rate-setting monetary policy committee (MPC) will publish the minutes for its August 4 and 5 meeting, at which it raised rates by 0.25 per cent to 4.75 per cent.

The last minutes (published on July 21) reveal that the nine-strong MPC was unanimous in its decision to increase rates in July by 0.25 to 4.50 per cent.

The MPC meets next to set interest rate on September 8 and 9, revealing its decision at noon on September 9 and publishing its minutes for that meeting on September 22.