Rates expected to remain at 0.5%
Interest rates are expected to be kept at their record low by Bank of England policy makers, who are now in a "very difficult position".
Rate setters at Threadneedle Street have to weigh the concerns of soaring inflation and commodity prices with the threat of putting the fragile economic recovery at risk.
Some economists are calling on the central bank to start to tackle inflation, which reached 3.3% as measured by the consumer price index (CPI) in November, due to rising costs of oil, clothes and food.
It is the responsibility of the Bank's Monetary Policy Committee to make sure CPI inflation does not go higher than 2%, but they have admitted it could reach 4% by the spring. However economists believe they would rather leave rates unchanged and brave above-target inflation than risk a "double-dip recession".
The base rate has been set at 0.5% since March 2009.
Putting up interest rates may help reduce inflation but it would also restrict the spending power of homeowners with tracker mortgages and people repaying other debts, which would further endanger the recovery.
Another round of quantitative easing, or money printing, is also not expected because this would further add to inflationary pressures.
Howard Archer, chief economist at IHS Global Insight, said: "The Bank's Monetary Policy Committee (MPC) is now in a very difficult position.
"Although the UK market achieved very decent growth in the second and third quarters it is still in a very fragile state following the deep recession.
"We suspect most committee members will be reluctant to adjust policy until they get a clear idea of how the economy is reacting to fiscal policy being tightened from the start of 2011."
Consumers' spending power is being squeezed because pay packets are not keeping up with inflation.
There has been a barrage of bad news for cash-strapped consumers in recent weeks as petrol, gas and clothes all rose in price, and last week's VAT rise from 17.5% to 20% pushed up the cost of most goods and services.