Analysts are nearly united in predicting that the Bank of England's Monetary Policy Committee (MPC) will cut rates by a quarter of a point this week, dropping the base rate to 4.5%. 

A Reuters poll found that 43 of 47 economists expect a cut when the MPC meets on Thursday. Their speculation was reinforced by recently released minutes from the July meeting, which showed a committee deadlocked on reduction.

Governor Mervyn King cast the deciding vote, preventing a cut.

"We expect that with the economic data having weakened and the Bank to fully analyse the recent downward revisions to growth in the context of its quarterly forecast round, the MPC will opt to cut rates by 25bps this month," said George Buckley, UK economist at Deutsche Bank.

"We would assign a probability of around 80% to such an event, with a number of risks having developed over recent months."

Meanwhile, a manufacturing lobby has urged the Bank to cut rates this week to stimulate slowing economic growth and boost confidence.

The Engineering Employers' Federation (EEF) has not previously called for a cut because it believes any cut must be sustainable, the organisation said.

In light, however, of weakening growth and declining business confidence, political uncertainty and a benign outlook for inflation, the EEF said it believes the Bank can now safely make a cut to the nation's base rate.

"The Bank has been right to ignore premature calls for a cut in rates which might not have been sustained," said Martin Temple, EEF director general.

"However, on balance we believe it should move now to shore up business and consumer confidence at a time of growing uncertainty."

Temple said that the EEF continues to dispute the accuracy of official data on manufacturing output, claiming that the organisation's own evidence suggests volumes remain reasonable and that conditions are flat at worst.

Factory figures, released today by the Chartered Institute of Purchasing and Supply (CIPS), show the beleaguered sector contracted for the fourth consecutive month in July. CIPS' index fell to 49.2, down from 49.6 in June.

"Declining confidence in the manufacturing sector will weigh heavily on the MPC members during their next meeting as further confirmation that the UK economy is slowing down," said Thushani Gajasinghe, economist at the Centre for Economics and Business Research.

"With this news it becomes even more likely that the MPC will cut rates."