6 December 2007
The Bank of England is under increasing pressure to cut interest rates today.
Analysts are widely expecting the cost of borrowing to drop from current levels of 5.75% to 5.5% following the Monetary Policy Committee's (MPC) monthly meeting today.
Interest rates have risen five times since August 2006, however they have been kept on hold since July.
Experts say one of the key factors behind a likely cut is that the Libor, the rate at which banks to led to one another, has shown sharp growth.
This has led to a return of the credit crunch seen during the summer.
Reuters states that the decision remains on a "knife edge" as the MPC are forced to balance a "sharp economic slowdown against rising price pressures".
Meanwhile, Global Insight's Howard Archer has said that this month's rate decision remains "one of the tightest calls ever".