THE Bank of England should move to bolster the economy today with a cut in interest rates, four out of nine members of The Times Monetary Policy Committee (MPC) said yesterday amid anxiety over faltering growth.

As worries were fuelled by figures showing manufacturing stagnating and homeowners further scaling back borrowing against their properties, pressure on the Bank to act was emphasised by the close vote among the independent experts.

In addition to the four members of The Times panel backing an immediate rate cut, four of the remaining five said that their recommendation was a close call.

Most City economists expect that the Bank’s own MPC will debate a cut today but defer action until after its August forecasts.But analysts said that the case for a reduction was reinforced by yesterday’s latest dose of weak data. The manufacturing sector endured another grim month, with output barely rising in May. In the three months to May output tumbled by 1.9 per cent — the sharpest such fall for nearly three years.

The National Institute of Economic and Social Research (NIESR) estimated that the data pointed to the economy expanding by a meagre 0.3 per cent in the second quarter, against the 0.4 per cent officially reported for the previous three months.

Recent growth has been hit by a downturn in consumer spending growth, which fell to only 0.1 per cent in the first quarter.

Fears that the consumer downturn will be prolonged were heightened by the Bank’s latest figures for mortgage equity withdrawal, when homeowners borrow against increased property values for reasons other than moving home. The amount of cash raised in this way fell to £6.4 billion in the first quarter from a revised £8.3 billion in the previous three months and a peak of £17.7 billion in late 2003.

In The Times MPC vote, Martin Weale, NIESR’s director, and Sir Steve Robson, former Treasury Second Permanent Secretary, added their voices to call for an immediate rate cut. They were joined by The Times’s Anatole Kaletsky and Sushil Wadhwani, a former member of the Bank’s MPC, who also voted for a cut in June.

Sir Steve said that last week’s overhauled GDP data “suggested that the economy has been losing momentum for a good deal longer than previously thought”. “There are no new factors in prospect which would give it new momentum,” he said. Inflation remained subdued, he added. Mr Weale echoed this, arguing that growth was likely to have been below its long-term trend for a year.

Geoffrey Dicks, of RBS Financial Markets, agreed that “rates need to come down” but favoured waiting until August. Rupert Pennant-Rea, a former Bank Deputy Governor, said that he would “just” vote for no change in a “difficult call”.

Martin Taylor, former Barclays chief executive, and Sir Alan Budd, former Treasury chief economic adviser, also said it would take little to persuade them to back a cut. But Diane Coyle, of Enlightenment Economics, argued that a lack of spare capacity and inflationary pressures from oil and import prices made the case for the Bank to hold fire.