Weakening economic growth will probably keep UK interest rates on hold for the rest of this year and most economists now expect the next move to be a cut, a Reuters poll shows.

All 45 economists surveyed May 31-June 2 expected the Bank of England's Monetary Policy Committee to leave interest rates at 4.75 per cent when its next meeting ends on June 9, and only 17 of them saw any change in rates this year.

The mid-range forecast gave a 70 per cent chance that the next move in interest rates would be a cut, and a 30 per cent chance of a hike.

"There has been nothing over the past month to change our minds that rates have peaked and if anything our view has been reinforced," said Philip Shaw at Investec.

Twenty-seven of the 37 economists who gave a forecast for the next move said it would be a cut. In a comparable poll two weeks ago, 17 of 32 had thought so, while at the end of April it was 14 out of 45.

The mid-range forecasts were unchanged from two weeks ago, showing the key repo rate ending this year still at 4.75 per cent, before being cut to 4.50 by the end of 2006.

"It is clear that the slowdown in consumer activity is not a flash in the pan, while uncertain trends in the US, plus further disappointment in euro area growth prospects, look set to weigh on exports," Mr Shaw said.

"By the same token the MPC looks unlikely to be in a hurry to cut rates, and unless (retail) spending grinds to a halt, it will wait until early next year to make a move."

Of the 27 economists who said the next move in rates would be a cut, three expected it in August, eight in the final quarter of this year, nine in the first three months of 2006 and seven later in 2006.

Ten of the economists forecast a hike - six in the second half of this year, two in February 2006 and two in August 2006.

The Bank of England started raising rates from a four-decade low of 3.5 per cent in November 2003, aiming to calm consumer spending and house price inflation. It last raised rates in August 2004 and back then most had expected it to hike further.

But data have increasingly suggested that the tightening has taken its toll on consumers, while a global slowdown has hurt the manufacturing sector.

"The BoE rate hikes are already having the intended effect," said Lena Komileva at Tullett Prebon. "There is no need for the BoE to accelerate the process by hiking rates further, especially against a weaker global economic backdrop."

The May Purchasing Managers' Index showed Britain's manufacturing sector contracted at its fastest pace since March 2003, while data from the Bank of England showed that April consumer credit growth was the weakest in one-and-the-half years.

Britain's economic growth for the first quarter was revised down last week, to 0.5 per cent quarter-on-quarter and 2.7 per cent year, from 0.6 and 2.8 per cent respectively.

"The outlook for consumer spending continues to deteriorate, given heavily indebted households are facing a growing risk of a housing market downturn, higher taxes and greater job insecurity," said James Knightley at ING Financial Markets, forecasting a cut in August.

"This is likely to mean that GDP growth will continue to moderate, which should ease inflationary pressures and offer scope for interest rate cuts."

However, others said it was too soon to completely rule out the possibility of another hike, particularly if global growth picks up in coming months or the housing market slowdown proves short-lived.

Forecasts for the end of 2006 ranged from 3.5 to 5.5 per cent.