Rates set to be held once again

The majority of market analysts have suggested that interest rates will be held at 5.75 per cent for the fifth month in a row tomorrow, though one firm has now changed its mind and predicted a fall.

Analysts from the likes of Lloyds TSB, HSBC and the Royal Bank of Scotland have all said that rates will remain at 5.75 in December, though most are of the opinion that a fall will materialise early in the new year.

The Centre for Economics and Business Research, meanwhile, has said that there is only "a 20 per cent chance of a cut" when the Monetary Policy Committee announces its decision on Thursday, but Global Insight disagrees.

"[We believe there are] increased worries within the MPC that the U.K. economy is headed for a sharp downturn," commented Global Insight chief UK and European economist Howard Archer.

"Consequently, we expect a majority of MPC members to come to the conclusion on Thursday that a 25 basis point interest rate cut to 5.50 per cent is justified to counter the increasing downside risks to growth," added Mr Archer.

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