The Bank of England left its key lending rate at 4.75 per cent today for the third month in a row, and a growing number of economists now believe the next move in interest rates will be down.
"The Bank was right to do nothing this month. It's clear the economy has slowed since the summer as the earlier rate rises have begun to take effect and global conditions have become more difficult," said Mr Ian McCafferty, chief economic adviser at the Confederation of British Industry.
"Quite well how the economy performs into next year is highly uncertain, so the MPC [monetary policy committee] should keep rates on hold until the outlook becomes clearer, " he added.
But rising expectations that UK interest rates have peaked while they are far more likely to rise in other parts of the world have sent the pound sharply lower on a trade-weighted basis in the past few months.
The MPC will have to balance the boost that this is likely to give to inflation and activity against signs that the economy has slowed even faster than expected when it releases its new forecasts in its quarterly Inflation Report next week.
The country's largest mortgage lender said today that house prices fell at their sharpest rate since the end of the dotcom bubble four years ago, and other signs point to a further slowdown in the coming months.
"It (the MPC) may start getting worried as the correction could become more pronounced than what would be desirable. With this in mind, the MPC is probably done for the current interest rate cycle," Mr said Lorenzo Codogno, economist at Bank of America.
"The next BoE rate move will likely be a cut," he said.