The Bank of England is tipped to keep British interest rates at a record low 0.5% on Thursday at its final monetary policy meeting of 2010 and before an expected slowdown in economic growth.
As Britons spend heavily ahead of Christmas, and before planned tax hikes and cuts to government spending in 2011, analysts said the Bank of England was also unlikely to pump up the economy with fresh stimulus under Quantitative Easing.
Analysts said that the Bank of England is poised to end 2010 without giving any presents to the economy in the form of more quantitative easing but also not acting like Scrooge by putting interest rates up.
The bank launched a QE programme in March 2009 in an attempt to drag Britain out of a deep recession sparked by the global financial crisis. The same month, it slashed interest rates to 0.5%, where they have stood ever since.
Under QE, the bank created £200 billion sterling of new money by purchasing government bonds and high-quality private sector assets, but the radical scheme ended earlier this year.
With Britain expected to experience slower growth in 2011, economists are predicting that the BoE could resort to more QE in the months ahead. Britain's economy expanded by a robust 0.8% in the third quarter compared with the previous three months, and expanded by 2.8% compared with a year earlier.
However, the government expects growth to slow more than expected in 2011 and 2012 as sweeping austerity measures begin to bite.
The UK escaped from a record-length recession late last year after a fierce worldwide downturn that was sparked by the global financial crisis but in a bid to slash a record-high public deficit, the coalition government has launched the biggest public spending cuts for decades.
It has also unveiled plans to increase sales tax to 20% from the current 17.5% on January 4, 2011, a move many expect to dent consumption significantly.
