Global investment bank JP Morgan on Wednesday forecast that South Korea's central bank could take a "big step" of raising its interest rate by 50 basis points as part of efforts to keep a lid on growing inflation pressure.

JP Morgan also expected the Bank of Korea (BOK) to continue the sequence of its rate hikes in the months to come and raise the rate to as high as 3 percent by the end of the year.

The forecast is based on its analysis of minutes the BOK disclosed a day earlier on the monetary policy board (MPC) meeting held last month, in which the central bank hiked its policy rate by a quarter percentage point to 1.75 percent. It was the fifth increase in borrowing costs since August last year.

"While the minutes did not directly guide the specific width and timing of follow-up hikes in coming meetings, the members' arguments suggested that the committee would not hesitate to preemptively react to risk cases in inflation," Park Seok-gil, an analyst at JP Morgan, said in a report.

"Our revised assessment ... and interpretation of the MPC minutes suggest more aggressive policy rate hikes, adding there will be more 50 basis point hikes by end-2022 to 3 percent," he added.

He noted that the latest rate-setting meeting minutes "provide various arguments by the members to expect sustained inflation pressure, including expectations of a spiral between wages and inflation, and downward rigidity of core service prices."

Inflation pressure is mounting in South Korea driven by high prices of oil and commodities whose supplies have been snarled amid global supply chain disruptions and the ongoing war in Ukraine.

Consumer prices jumped 5.4 percent last month from a year earlier, which was the fastest clip in almost 14 years. Price growth is expected to stay over 5 percent for the time being.

The BOK has said that the possibility of a big-step rate hike will not be ruled out should inflation woes persist.

The BOK's recent monetary tightening has raised concerns over its impact on the economy that has been recovering from the pandemic thanks to robust exports but facing heightened uncertainty at home and abroad.

The central bank's next rate-setting meeting is scheduled for July 13. (Yonhap)