fall in interest rates to 4.5% is a 'done deal'.
The move will signal a change in direction by the Bank's Monetary
The bid to revive the economy follows official data released this
month showing the economy grew at its slowest rate in 12 years.
Other figures showed personal debt rose at its slowest pace in more
than two years in June, suggesting households' appetite for debt is
Philip Shaw, economist at Investec Securities, said the more
subdued economic background was the main motivation for easing
He said: 'Thursday should confirm what most Bank of England
watchers are suspecting, namely that the interest rate cycle has
The higher cost of borrowing has been successful in slowing
consumer spending and stabilising the housing market. However,
stronger retail sales data for the month of June complicated the
Mr Shaw said he expected the Bank to show a degree of caution when considering the outlook for the rest of the year.
He said: 'We are still tending to view that the MPC will be
cautious in untwisting the monetary screw too quickly.'
Investec expects rates to fall to 4% next year.
Economist John Butler at HSBC said: 'We expect a cut in August and then for the MPC to pause to await the response, if any, from the
corporate and household sector.'
Ross Walker at Royal Bank of Scotland believed this month's
decision was a 'done deal' and said he was expecting one further
reduction - although probably not until next year.