Further rate cuts 'expected'

Analysts are predicting further, aggressive rate cuts by the Monetary Policy Committee (MPC).

Vicky Redwood at Capital Economics told the Press Association that October's MPC minutes suggest that the committee will continue to act "aggressively" when it comes to cutting rates.

According to the minutes, the 50 percentage point reduction earlier this month was passed unanimously.

"Not only did all members vote for the 0.5 per cent cut, but the discussion was unambiguously dovish," Ms Redwood said.

The analyst forecast that rates could fall to 2.5 per cent, which would represent the lowest since 1951, or even hit an all-time low of two per cent by next year.

A number of experts are predicting a further 0.5 per cent rate cut next month.

Meanwhile, the prime minister has admitted for the first time that the UK is on the road to recession, mirroring a similar statement this week by Mervyn King, governor of the Bank of England.