The Bank of England will hike borrowing costs 50 basis points higher than projected only two weeks ago, in two quarter-point increments, as rising inflation proves more difficult to bring down than expected, according to analysts polled by Reuters.

Last week, the Bank of England stunned investors by hiking interest rates by half a percentage point, lifting the Bank Rate to 5.00%, and stating that there had been “significant” news indicating that persistently high inflation in the United Kingdom would take longer to decline.

Mortgage rates have already shot up, meaning the 800,000 borrowers who still need to refinance this year, and a further 1.6 million homeowners next year, face much higher repayments.

Bank Rate is now expected to peak at 5.50% next quarter following 25 basis point hikes at the BoE’s August and September meetings, medians in the poll taken after the Bank’s Thursday move showed.

In a June 14 poll, policymakers were expected to draw a halt at 5.00% next quarter.

“Something has definitely shifted. It’s quite hard to reconcile what they said in May with their decision in June so I think they are losing confidence and patience in their models,” said James Smith, developed markets economist at ING.

“Are they going to be happy with just one more 25 basis points in August? I suspect not, which is why we have 25 for August and 25 for September and they could even do more.”

A cut in borrowing costs was not expected until the second quarter of next year.

Stubborn inflation defied predictions of a slowdown and held at 8.7% in May, official data showed the day before the BoE’s decision, and the previous poll suggested it wouldn’t be at the 2% target until 2025.

Markets are now pricing in a terminal rate of 6.00% and while that is higher than the poll median, the vast majority of respondents to an extra question, 31 of 34, said the bigger risk to their terminal forecast was that it peaked higher than they currently expect.

Only one economist had a 6.00% peak as their base case.

Over 95% of common contributors to this poll and the June 14 survey, 43 of 45, raised their Q3 forecasts.

Amongst the gilt-edged market makers – primary dealers in UK government bonds – who participated in the latest poll, six had a peak of 5.50%, six said 5.75% and one said 6.00%.

Forty of 52 poll participants said the Bank would dial down the pace to 25 basis points on August 3 but gave a high median 40% chance of another 50 basis point lift.

“I doubt that 50bp increments are the new normal until the greedy inflation beast is tamed, but the central bank signalled its willingness to inflict pain,” said Stefan Koopman, market economist at Rabobank. “Going against the consensus helps to strengthen this signal.”