Economists are split over whether the Bank of England will cut interest rates this week but most agree the cost of borrowing will fall again before the summer.
The Bank's rate-setting Monetary Policy Committee (MPC) begins its meeting on Wednesday and will announce it decision at noon on Thursday.
Economists and City analysts are divided with some expecting rates to be kept at 5.25 per cent with others predicting a cut to 5 per cent.
"Frankly it's really 50-50," said David Kern group chief economist at NatWest.
While the MPC's official target is to keep the underlying rate of inflation at 2.5 per cent, the committee is likely to be swayed by other indicators such as the value of the pound, wage settlements and unemployment levels which all help point the future direction of prices.
