The Bank of England was today urged to shave 0.25 per cent from the cost of borrowing, as it sat down to start its monthly rate-setting meeting.

The TUC called for the move, which would see rates cut to 3.75 per cent, to provide some relief to Britain's hard-pressed manufacturers.

TUC general secretary John Monks said: "There are three very powerful arguments for a rate cut tomorrow."

He said firstly the Bank's "over-cautious" record showed it had consistently undershot its inflation target for the last three years.

He added: "The impact this over-caution has had has been to further squeeze Britain's hard pressed manufacturing sector, with more than 200,000 job losses in the past year and a half.

"To make matters worse, these job losses have been concentrated in the Midlands and the North, where service sector growth has been weaker.

"On the exports front, global economic growth is a lot weaker than expected."

He said the third reason was that the previous inflationary pressures from the consumer spending boom had now receded.

However, according to City expectations the union will be disappointed.

Analysts expect rates to be kept on hold at four per cent for the tenth month in a row amid continued weakness in the stock market and signs the housing and retail boom have cooled.

John Butler, economist at HSBC, said: "The domestic economic data looks robust but the equity market still looks fragile and global uncertainties persist.

"While the dark cloud from the global economy remains, rates are likely to stay on hold."

The Bank's decision will be announced at midday tomorrow.