Bank of England policymakers meet tomorrow to decide whether to reduce interest rates for the second month in a row, with recent economic data seen as reducing the chances of back-to-back cuts.
Rates were cut to 5.5% from 5.75% last month in the first decrease for more than two years because of the ongoing global credit squeeze which threatens to derail economic growth.
BoE policymakers were united in their decision to cut interest rates in December - which marked the first reduction since August 2005.
Recent stronger-than-expected data on Britain's housing market diminished market expectations that the Bank of England would cut interest rates tomorrow, economists said.
Halifax, the country's biggest mortgage lender, has revealed that British house prices unexpectedly rose in December. It said house prices, on a seasonally-adjusted basis, rose by 1.3% in December from the previous month, following three months of declines.
Dismissing the positive data, however, Britain's retailers are calling for a rate cut after enduring their worst Christmas for three years. The British Retail Consortium said British sales rose by only 0.3% last month on a like-for-like basis, compared to a rise of 2.5% in December 2006.
