BOGOTA (Reuters) - Colombia's central bank will raise the benchmark interest rate 25 basis points at its meeting next week, likely for the last time in this tightening cycle, amid persistently high inflation, analysts polled by Reuters said on Wednesday.

A quarter-point increase to 7.5 percent would mark the tenth consecutive month policymakers have raised the rate to combat inflation, which reached 8.20 percent in May, more than double the upper limit of the bank's long-term target range.

Eighteen of 20 analysts surveyed by Reuters predicted a 25 basis points increase, while the remaining two said the seven-member bank board would leave borrowing costs unchanged at 7.25 percent.

"It's clear that cost pressures are still winning because of a negative production gap that is not yet contributing to controlling inflation," ANIF, the national financial institution association, said in a report.


A rate rise would mark the last increase in the bank's nearly year-long tightening cycle, which has raised borrowing costs by 300 points, a majority of the analysts said, after comments by several board members indicated the cycle may be drawing to a close.

Finance Minister Mauricio Cardenas, who represents the government on the board, said on Wednesday that rate rises "are coming to an end, if they have not already ended."

"I'm convinced that monetary policy has had its effect, we can't exaggerate the decline in demand, we must be prudent," Cardenas said on local radio.

Board member Cesar Vallejo told Reuters this month that an end to rises was approaching, but that economic growth would allow policymakers to continue increasing interest rates to control inflation if necessary.

Inflation will reach 6.20 percent in 2016, analysts said, up from the 5.95 percent predicted in last month's poll. The government raised its inflation estimate for the year to 6.5 percent on Tuesday.

Consumer prices will be up 0.33 percent in June, compared to 0.10 percent recorded during the same month last year, those polled said. That would push 12-month inflation to 8.43 percent, well above the bank's 2 percent to 4 percent target.

"Inflation's convergence to the target will be especially slow, thanks to factors like indexation, inflation expectations which remain high and temporary factors that could prevent certain components from notably decreasing in the short term," said Andres Naveros, an analyst at Banco Agrario.

Analysts' inflation expectations for the end of 2017 were up to 4.10 percent, from 4 percent in the last poll.

(Reporting by Nelson Bocanegra; Writing by Julia Symmes Cobb; Editing by Meredith Mazzilli)