The Bank of England looks set to keep interest rates at five per cent this week before cutting them next month for a fourth time since December to shore up an economy buffeted by the global credit crunch.
Only five of 65 economists polled last week predict the Monetary Policy Committee will cut rates. Most think back-to-back rate cuts are unlikely because of concerns over inflation.
"We believe next month is a much better bet for the timing of the next interest rate cut," said Alan Clarke, an economist at BNP Paribas.
"A move in June would maintain the recent pace of one cut every two months. It would also allow the accumulation of more concrete evidence that the economic data are deteriorating."
While there is little doubt the economy is slowing, inflation has been above the Bank of England's two per cent target since October and is likely to rise even further in the coming months as rising food and energy prices work their way through the system.
The price of oil shot to a new record of under $124 a barrel this week. On the other hand, a slowing economy means inflationary pressures are unlikely to build for long. Wage pressures are remarkably subdued and there is a risk that a sharp downturn in the housing market could turn what the central bank sees as a necessary slowdown into something more nasty.
David Blanchflower, the most dovish member of the nine-member monetary policy committee, has warned that without aggressive interest rate cuts the economy could tip into recession and house prices could fall by as much as a third.
The economics newsflow has taken a turn for the worse. Britain's dominant services sector grew at its weakest rate in five years last month while house prices, as measured by the country's biggest mortgage lender, fell at their fastest annual rate in 15 years.
Still, there is little sign that the more hawkish members of the committee are softening their stance.
Timothy Besley and Andrew Sentance both opposed last month's majority decision to cut interest rates and have used recent speeches to stress the risks posed by inflation.
The Bank of England will publish updated forecasts for growth and inflation next week which are likely to show that both the price outlook and the growth outlook has deteriorated since the last forecasting round in February.
Most economists expect the Bank of England quarterly Inflation Report to leave the door open to further interest rate cuts, but at a gradual pace.
"We think that after a pause this week the Monetary Policy Committee will cut interest rates again in June and eventually all the way to 3.5 per cent," said Paul Dales at Capital Economics.