The Bank of England is expected tomorrow to slash interest rates for a third month in a row, bringing them to their lowest ever levels as Britain readies to join a growing list of nations officially in recession.
UK interest rates have never stood below the current level of 2% since formation of the Bank of England in 1694, 315 years ago.
Analysts are forecasting the Bank of England's nine-member Monetary Policy Committee will reduce the central bank's key lending rate by as much as 1% tomorrow at the conclusion of its latest monthly two-day meeting. A decision is due at 12 noon tomorrow.
The Bank of England has embarked on a policy of sharp rate-cutting since late last year, in line with the US Federal Reserve and European Central Bank, as the global economy grapples with its worst period since the 1930s Great Depression.
The Bank of England believes that Britain is already in recession although this will be confirmed officially only following publication of economic growth data later this month.
The UK economy contracted by 0.6% in the three months to September compared with output in the previous quarter, the country's official statistics body said recently. That was the steepest quarterly drop since 1990 but Britain is not officially in recession until it reports two quarters in a row of negative economic growth, or contraction.
Ahead of the interest rate decision tomorrow, the latest figures reveal that British house prices slumped by a record 16.2% in the three months to December 2008. Britain's leading home loans provider Halifax, which gathered the data, added that prices were set to fall further in 2009.
