The Bank of England is expected to leave interest rates on hold at 5.00 percent on Thursday, ruling out a second successive cut amid stubbornly high inflation, according to analysts, the AP reported.
Nearly all economists polled expect the Bank to make no change to policy after the conclusion of a two-day meeting that kicks off on Wednesday.
The BoE lowered its benchmark rate by a quarter of a percentage point to 5.00 percent in April, concerned that the economy was slowing badly but watchful too about growing inflation risks.
"We think that inflation concerns will trump at May's meeting, meaning that rates stay at five percent," said Capital Economics analyst Vicky Redwood.
"However, we should only have to wait until June for another cut."
Inflation was 2.5 percent in March, unchanged from February but above the Bank of England's 2.0-percent target for a sixth straight month.
At its last meeting, the BoE's nine-member monetary policy committee (MPC) cut its key interest rate by 25 basis points as it sought to balance the risks of rising near-term inflation and an economic slowdown resulting from the credit crunch.
Britain's economy made a poor start to 2008, with first-quarter growth stumbling to a three-year low.
The economy grew by 0.4 percent in the three months to the end of March, the slowest rate of gross domestic product (GDP) growth since the first quarter of 2005, according to official data.
"Recent weak data and survey evidence relating to consumer confidence, retail sales, the housing market and manufacturing activity heightens concern that the UK economic downturn is deepening and adds to the pressure on the Bank of England to quickly cut interest rates again despite current elevated inflation levels and risks," said Global Insight economist Howard Archer.
"We still modestly lean towards the view that the next cut in interest rates ... to 4.75 percent, will come in June."
Also on Thursday, the European Central Bank is widely expected to keep eurozone borrowing costs at 4.00 percent.
The US Federal Reserve last week cut its key lending rate by a quarter-point to 2.00 percent in a fresh bid to fire up the US economy.
The Bank of England has acknowledged that near-term inflation will shoot higher because of soaring commodity prices. The price of crude oil struck a new record high above 122 dollars a barrel on Tuesday.
The decision to hold borrowing costs at current levels Thursday should come despite a report out last week showing that house prices fell 1.3 percent in April from March and were down on an annual basis for the first time in 12 years.
Halifax, the country's biggest provider of home loans, said the decline was driven by a squeeze on spending and the rapid rise in house prices in the last few years while rate rises in 2007 had led to higher mortgage costs.
Home owners are also seeing the value of their properties fall as banks become less willing to offer mortgages to higher-risk borrowers amid a squeeze on credit caused by the recent collapse of the US subprime home loan market.
"We are admittedly a little rattled by the extent of the bad news on the housing market recently and also a relatively soft 0.4-percent rise in GDP in the first quarter," Investec analyst Philip Shaw said.
"It does seem likely that the MPC will ease again and our forecast of a 25 basis-point cut in June, followed by a pause, is still pencilled in.
"But central banks do change their minds on their assessment of economies and the critical factor here is whether the various measures to ease the dislocations in the credit market take effect over the next few months," he added.