Michael Hughes, Barings Asset Management: cut should be at least half a percent

At its last meeting the Bank cut rates by 0.25% to 7.25%, and many are hoping that the Bank will make an even larger cut this time.

The cut would be good news for businesss and homeowners, who have seen interest rates rise six times over the past year and a half.

Rory Cellan-Jones: "Unions warn that reducing interest rates is essential to avoid large scale job losses"

Business organisations and trade unions have joined forces in their calls for a rate cut of at least 0.5%. They point to recent job losses, evidence for an imminent recession in the manufacturing industry and a sharp slowdown in the service sector.

The Conservatives and some analysts go further and have demanded a rate cut of 1%.

Recent economic data, however, suggest that the UK economy could be stronger than some economic surveys have suggested, reducing the need for a large rate cut.

Not whether, but how much

The government will also be hoping that the Bank makes further rate cuts. On Tuesday the UK Chancellor had forecast that economic growth would slow to between 1% and 1.5% next year.

But meeting even that forecast assumes that the Bank will continue to lower rates.

Last weekend the Bank of England's governor Eddie George was among the central bank bosses and finance ministers from the big industrial countries who all agreed that the balance of risk in the world economy had shifted from inflation to recession.

Most independent forecasters believe that it is not a question of whether, but by how much the Bank cuts rates.

There has been a fundamental shift of opinion in the Monetary Policy Committee in the last two months.

At its last meeting all nine members of the commitee wanted to cut rates - but two wanted to cut by more than the quarter-point that was agreed.

Since that meeting, the US Central Bank has cut interest rates again, and a number of continental European countries have lowered there rates towards the 3.3% interest rates in Germany and France - which are likely to set the standard when those countries join to form a single currency in January.

What is unclear is whether the Bank can now move fast enough to prevent the global financial crisis from hitting Britain.

It will be hampered in its deliberations by the absence of data on UK wage inflation - one of its crucial worries in the past.