Financial turmoil, plus last week’s gloomy manufacturing data have increased pressure on the Bank’s Mone­tary Policy Committee to reduce rates.

Economists say a quarter of a percentage point cut is most likely but some think a half-point reduction is possible.

A rate cut would help bolster the housing market and consumer spending. The Bank has held off trimming rates until now because of rising inflation.

Centre for Economics and Business Research economist Charles Davis said the balance of opinion had swung in favour of a rate cut following the manufacturing sector’s downbeat figures.

“I expect a quarter-point rate cut next week. There is an outside chance of a half-point cut, but the MPC members are generally a conservative bunch,” he said.

Howard Archer, chief UK economist at think-tank Global Insight, said: “I am forecasting a rate cut next week and I would not rule out a 50 basis point (0.5 per cent) cut because a 25 basis point (0.25 per cent) reduction is likely to have little impact.”