It is hard to recall a time when the Monetary Policy Committee’s musings have proved so contentious – or when its likely decision has been so hard to call.

Yesterday, the consensus view among economists was that the Bank of England committee would leave rates on hold at 5.75 per cent. But as the MPC sat down to its two-day meeting this morning, the weight of opinion perceptibly shifted on the release of two closely watched barometers: a Halifax survey, which showed that house prices fell 1.1 per cent last month, the biggest drop for nearly a year; and the monthly purchasing managers' index from the Chartered Institute of Purchasing and Supply, which fell to 51.9 in November, its lowest level since May 2003.

That data prompted two heavyweight ratewatchers, Barclays Capital and RBC, to revise their opinion and predict a cut to 5.5 per cent tomorrow.

The equity markets are beginning to lean that way. The FTSE 100 had put on 96 points by lunchtime, with housebuilders such as Barratt Developments, Taylor Wimpey and Persimmon showing the best gains.

Should the MPC act now, rather than waiting until February, it risks unleashing a mini-consumer boom in the run-up to Christmas. But with the capital markets still under severe strain, and confidence in the corporate sector starting to echo that of hard-pressed consumers, it is a risk worth taking.

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