'Action unlikely' on UK rates

The Bank of England is almost certain to keep interest rates on hold at 3.5%, analysts say.

All 45 economists polled by Reuters predicted the Bank's Monetary Policy Committee (MPC) would vote to keep rates on hold on Thursday.

Last month's clutch of economic statistics point to signs that the economy is beginning to recover.

"Pretty strong across the board," said George Buckley, an economist at Deutsche Bank.

"A rate cut tomorrow (Thursday) is not on the cards."

Signs of hope

The UK's dominant services sector expanded at its fastest pace in two and a half years in August.

While the UK's beleaguered manufacturing sector recorded a second consecutive month of growth.

Retail sales was the one area which did not register an improvement during August, but analysts put this down to the hot weather rather than to an underlying economic trend.

The majority of analysts now believe that the next move in UK interest rates will be up rather than down.

Up not down

"I think 3.5% represents the trough for the cycle," said Stephen Lewis, chief economist at Monument Securities.

Over the past two years, the bank has primarily been concerned with injected life into the fragile economy, leading to a series of rate cuts.

But there is growing concern over the record level of debt being run up by consumers.

Last week, MPC member Paul Tucker warned that debt-laden consumers should be prepared for higher borrowing costs ahead.

The decision will be announced at 1100 GMT.