A further boost to the economy through more quantitative easing will be considered by the Bank of England's Monetary Policy Committee this week to combat recession.
Thursday's meeting is complicated by concerns that the Government may look to fresh measures to kick-start growth in the wake of last week's local election setbacks.
Economists say the decision on QE is finely balanced but most feel the MPC will hold off from pumping another £25bn - £50bn into the economy because of worries about inflation and indications of modest underlying growth despite the slide into recession in the first quarter.
Howard Archer, chief UK and European economist at IHS Global Insight, said the decision could well "go down to the wire" and be influenced by the clutch of data and statistics due out this week.
Industrial production figures for March are expected to show a small improvement after the slide in February while a British Retail Consortium review will pinpoint how much bad weather dampened shop sales and contributed to a 30pc jump in shopping from home business.
The Chancellor is under pressure from uneasy Tory backbenchers to provide more stimulus but George Osborne is playing down suggestions of any early end to the age of austerity.
He admitted in a BBC interview that "things have gone wrong" but said plans to improve infrastructure and schools would be followed by a boost for housing.
He confirmed that banking reform in the shape of a separation of retail and investment operations would be an important part of the measures in the Queen's Speech on Wednesday.
The decision reflects the Government's support for recommendations from the Independent Commission on Banking.
The Queen is also expected to announce plans for a bill on public sector pensions and energy market reforms to stimulate competition in an industry where uncertainties about nuclear power development are being accompanied by efforts to encourage foreign countries, including Saudi Arabia, South Korea, China and the United States, to join construction consortia.
MPs are calling for a "wider vision" on housing finance to tackle the crisis in housebuilding. The Commons Communities and Local Government Committee in a report today wants institutions and pension funds to make a bigger contribution and remove their housing "blind spot".
telegraph.co.uk
Thursday's meeting is complicated by concerns that the Government may look to fresh measures to kick-start growth in the wake of last week's local election setbacks.
Economists say the decision on QE is finely balanced but most feel the MPC will hold off from pumping another £25bn - £50bn into the economy because of worries about inflation and indications of modest underlying growth despite the slide into recession in the first quarter.
Howard Archer, chief UK and European economist at IHS Global Insight, said the decision could well "go down to the wire" and be influenced by the clutch of data and statistics due out this week.
Industrial production figures for March are expected to show a small improvement after the slide in February while a British Retail Consortium review will pinpoint how much bad weather dampened shop sales and contributed to a 30pc jump in shopping from home business.
The Chancellor is under pressure from uneasy Tory backbenchers to provide more stimulus but George Osborne is playing down suggestions of any early end to the age of austerity.
He admitted in a BBC interview that "things have gone wrong" but said plans to improve infrastructure and schools would be followed by a boost for housing.
He confirmed that banking reform in the shape of a separation of retail and investment operations would be an important part of the measures in the Queen's Speech on Wednesday.
The decision reflects the Government's support for recommendations from the Independent Commission on Banking.
The Queen is also expected to announce plans for a bill on public sector pensions and energy market reforms to stimulate competition in an industry where uncertainties about nuclear power development are being accompanied by efforts to encourage foreign countries, including Saudi Arabia, South Korea, China and the United States, to join construction consortia.
MPs are calling for a "wider vision" on housing finance to tackle the crisis in housebuilding. The Commons Communities and Local Government Committee in a report today wants institutions and pension funds to make a bigger contribution and remove their housing "blind spot".
telegraph.co.uk
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