Billions of pounds of emergency cash are expected to be pumped into the economy on Thursday amid growing fears the UK remains mired in recession.
The Bank of England's Monetary Policy Committee (MPC) is widely predicted to boost its Quantitative Easing (QE) programme by another £50 billion to £375 billion when it announces the outcome of its latest monthly meeting.
Figures released this week showed the economy worsened in June, after the construction and manufacturing sectors contracted and the powerhouse services sector suffered its worst performance in eight months.
The Bank of England's Monetary Policy Committee (MPC) is widely predicted to boost its Quantitative Easing (QE) programme
Economists said the figures suggested the economy continued to shrink or at best was flat in the second quarter of 2012, making it more likely the Bank would swing into action.
Nida Ali, economic advisor to the Ernst & Young ITEM Club, said the surveys released this week "have disappointed" and "strongly suggest" the Bank will authorise additional QE at today's meeting, "probably to the tune of £50 billion".
And Chris Williamson, chief economist at Markit, which helped devise the surveys, said the results were "firmly in the territory that has triggered action from the MPC in the past".
The Bank and Treasury have recently made major moves to try to kick-start lending and rescue the country from a double-dip recession.
On Friday, the Bank said rules should be relaxed to free up billions of pounds of cash held on their balance sheets as a so-called liquidity buffer.
This followed the announcement earlier this month of a £100 billion-plus scheme to boost bank lending.
The Bank is working on a new "funding for lending" scheme, while last week it held its first £5 billion monthly auction under a six-month loan facility programme.
Bank Governor Sir Mervyn King said last week he was shocked at the pace at which economic conditions had worsened as he unveiled the biannual Financial Stability report.
Official figures also showed the double-dip recession was deeper than originally feared as revised figures revealed a sharper decline in the economy in the final quarter of last year, when gross domestic product (GDP) shrank by 0.4% between October and December, compared with a previous estimate of 0.3%.
In addition, inflation has fallen by more than expected in recent months, with CPI inflation coming down to 2.8% in May - the lowest level since November 2009 - which will give the Bank more leeway to restart its money printing programme.
The MPC has already come close to pushing the button on more QE, when minutes of the June rates meeting showed four of the nine-strong committee - including Sir Mervyn - were narrowly out-voted on more QE.
Against this backdrop, economists believe this month's will see the Committee agree on extending QE.
Howard Archer, chief economist at IHS Global Insight, is pencilling in a £50 billion increase, although he thinks £75 billion is also a possibility.
He said: "The MPC was on the brink of approving more QE at their June meeting and with latest economic data and surveys largely grim and the outlook uncertain and troubling, we believe that a majority of MPC members will decide that more QE is now warranted and justifiable.
"Meanwhile, the eurozone situation is still troubling, despite some recent positive developments."
However, the Bank is not expected to cut interest rates below their current historic low of 0.5%, despite a predicted rate cut by the European Central Bank on the same day.
Mr King and his MPC colleagues told MPs in a recent hearing on the Bank's last inflation report that while they stood ready to cut rates if needed, they saw little use of doing so.
They believe a rate cut could do more harm than good, by further reducing interest margins for small building societies, which could threaten their future and limit competition in the industry.
The Bank is expected to prefer to use other monetary tools to kickstart lending in the UK.
But there have been concerns that its actions will not encourage lenders to offer more cash, or indeed see recession-hit businesses borrow more.
Keith Williams, head of financial services at international investment bank Altium, said: “With the UK economy officially back in recession and no imminent end to the Eurozone crisis, it is highly likely that members of the Bank of England’s Monetary Policy Committee will choose to inject more QE, probably worth £50billion, into the economy on Thursday.
“The case for a further injection of QE has undoubtedly been strengthened by the continued positive developments on inflation. That will be in the minds of MPC members, since inflation is one of the key worries attached to QE. As a result, given the increasingly uncertain outlook, a further injection of QE is to be welcomed at this time.
“However, we would also be pleased to see the Bank in future consider some alternative and more innovative methods of injecting extra capital into theeconomy to stimulate growth, such as deployment to SMEs through regional banks, or even some form of direct lending.”