Bank of England expected to keep interest rates on hold at 0.5%
The Bank of England is expected to keep interest rates on hold today amid mounting concern over a slowdown in the economy.
Rates have remained unchanged at 0.5% for more than six years and are now not expected to rise until 2016 after reports signalled easing growth in the UK and global economy.
The Bank's Monetary Policy Committee (MPC) is likely to weigh up developments such as accelerating wage growth and the country's recovering economy, against the global turmoil caused by China's slowing trade performance and the UK's sluggish export growth.
Most economists forecast the MPC will vote eight to one in favour of keeping rates unchanged, mirroring last month's vote.
It is expected that only MPC member Ian McCafferty will continue to dissent on the ''no change'' position, although policymakers Martin Weale and Kristin Forbes have both indicated that interest rates will need to rise sooner rather than later.
Economists said disappointing global manufacturing data in recent days will ease the pressure on MPC members to lift interest rates, while forecasts suggest UK growth in the third quarter eased back, to 0.6% or even 0.5% from 0.7% in the previous three months.
In the UK, employment in the manufacturing sector fell for the first time in two-and-a-half years at the end of a ''lacklustre'' September, according to the closely-watched CIPS/Markit purchasing managers' index (PMI) survey.
The report added September rounded off one of the weakest quarters during the past two years, which saw factory job losses registered for the first time since April 2013.
It blamed the strong pound and weak export orders for the slowdown.
This report came amid a raft of weak manufacturing data from China, the US and the eurozone.
Expectations for a rise in US interest rates has been put back after job growth in the US, the world's powerhouse economy, slowed in September, and job gains for July and August were lower than previously thought, a sour note for a labour market that had been steadily improving.
The US added 142,000 jobs last month, although the economy has put on an average of 198,000 new jobs a month this year.
There was further gloom on the global picture yesterday when the International Monetary Fund (IMF) cut its growth forecasts to their lowest level in six years, predicting world growth of 3.1% this year, from its previous projection of 3.3%.
The Washington-based fund said a combination of Chinese slowdown, sliding commodity prices and uncertainty over when the US hikes interest rates would lead the world to its lowest annual growth rate since 2009.
But the IMF increased its forecast for UK growth this year by 0.1% to 2.5% from July, and next year it kept its expectation of 2.2% growth unchanged.
Howard Archer, chief UK and European economist at IHS Global Insight, said: ''There can be little - if any - doubt that the Bank of England will keep interest rates unchanged at 0.5% at the conclusion of the October MPC meeting on Thursday.''
Mr Archer added that it is ''currently an extremely tight call'' as to whether the Bank of England lifts interest rates from 0.5% to 0.75% around February, or holds fire until nearer mid-2016.
The MPC is also expected to vote nine to zero in favour of keeping the UK's quantitative easing total at £375 billion.