LONDON (Reuters) - The Bank of England will say on Thursday that Britain’s economy is heading for a much stronger recovery this year than it previously expected and it might start to slow its pandemic emergency support. The BoE forecast in February that the world’s fifth-biggest economy would grow by 5% in 2021, having slumped by 10% in 2020. That was a bigger hit than in most other European economies after Prime Minister Boris Johnson was slower to impose a coronavirus lockdown and had to keep it in place for longer in an economy heavily reliant on face-to-face consumer services. But many economists say Britain is now set to grow by more than 7% this year, boosted by its fast COVID-19 vaccinations. The BoE will announce its latest forecasts at 1100 GMT when it is also expected to keep its benchmark interest rate and its bond-buying programme unchanged, for now. “There’s a growing sense that the UK is finally on the way out of the pandemic, and with that comes an increased focus on the Bank of England’s future tightening plans,” analysts at ING said in a note to clients. “Indeed, we think the Bank may announce some tapering of its quantitative easing programme.” The BoE is spending 4.4 billion pounds ($6.12 billion) a week on its bond-buying programme, having cut the benchmark rate to an all-time low of 0.1% in March last year. That pace might slow to 3.2 billion pounds a week to allow the quantitative easing programme, currently capped at 895 billion-pounds, to last until the end of the year, analysts at Bank of America said. Such a move would represent a moderate step towards the moment when the BoE begins to reverse its emergency stimulus. Most economists polled by Reuters last month pencilled in a first rate hike only in 2023. On Wednesday, investors were pricing in a small 15 basis-point increase in rates by September of next year. EARLY SIGNAL? “The Bank of England remains a long way off tightening monetary policy, but could be one of the first central banks to signal it’s thinking about it,” Shamik Dhar, chief economist at BNY Mellon Investment Management. The Bank of Canada last month said it could start to raise rates by late 2022 and it pared back its bond-buying. The BoE is treading more cautiously. It said in February it was starting to work on its messaging about how it might tighten monetary policy in the future. Governor Andrew Bailey has signalled the BoE might start to shrink its massive bond stockpile earlier than it had outlined under his predecessor Mark Carney. That 2018 scenario foresaw no bond sales until the BoE’s benchmark reached 1.5%, a distant prospect now. Despite the revival of Britain’s economy - retailers and restaurants reopened last month and most restrictions are due to be lifted by the end of June - a big test awaits in September. That is when finance minister Rishi Sunak is due to finish phasing out a job support programme, the centrepiece of a public spending splurge that has left Britain with record peacetime borrowing. With unemployment likely to rise, analysts at Citi expect the BoE to resort to a further 50 billion-pound increase to its bond-buying programme in late 2021. The BoE is also keeping a close eye on how frictions on trade with the European Union weigh on growth. And an election for Scotland’s devolved parliament on Thursday could strengthen calls from nationalists for a new independence referendum that would create fresh political uncertainty for Britain’s economy. ($1 = 0.7195 pounds) Writing by William Schomberg; Editing by Alison Williams Our Standards: The Thomson Reuters Trust Principles.