Old Lady to freeze bank rate

THIS week's interest rate decision is finely balanced as worries continue over the slump in the economy.

However, most City economists think the Bank of England's Monetary Policy Committee will leave borrowing costs unchanged at 4.75% this Thursday, making a cut in August more likely.

New monthly data from the British Retail Consortium is expected to show that High Street sales are still falling, with like-for-like sales down around 1% in June.

Sterling has also slipped, closing last week at $1.77, as data from the Office for National Statistics showed that gross domestic product was growing slower than previously estimated.

Accounting firm Tenon found that optimism among small and medium-sized businesses was at its lowest level since 2003. Research from BDO Stoy Hayward shows that the outlook for the manufacturing sector remains bleak and the service sector has started to falter.

Two of the nine MPC members voted for an immediate cut in the June meeting.

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