The Bank of England is expected to hold interest rates at record lows and continue with its program to boost the money supply on Thursday despite growing signs of an economic recovery.
A raft of recent data has suggested that Britain is already climbing out of recession, but most economists expect the central bank to show caution about the strength of the potential recovery when it announces its monthly monetary policy decision.
The National Institute for Economic and Social Research, a leading independent forecaster, estimated this week that Britain recorded growth in the third quarter.
A gain in third-quarter gross domestic product would be the end of the recession — officially defined as the economy shrinking for two or more successive quarters — following a 0.7 percent contraction in the second quarter of the year and a 2.4 percent fall in the first quarter.
The latest report from the Recruitment and Employment Confederation confirmed the first improvement in the jobs market for 17 months as the fall in vacancies and pay eased.
And consumers appear to be shaking off recession gloom, as the Nationwide Building Society said its consumer confidence index rose by two points from July to 63 in August, up from a low of 44 in January.
Manufacturing figures showed the sector recording its strongest growth in more than three years. The improving mood was reflected on the London Stock Exchange, where shares hit their highest level of this year on Tuesday.
But the rising tide of good news is unlikely to change the Bank of England's caution. The central bank has warned that recovery is not assured and that it will take some months for its expansionary policies to work through the economy.
The bank will almost certainly keep interest rates at 0.5 percent and continue with its so-called quantitative easing program. The bank's monetary policy committee last month increased the size of that program by 50 billion pounds to 175 billion pounds.
Three of the nine-member committee, including Bank Governor Mervyn King, voted last month for an even greater increase, to 200 billion pounds, suggesting that a further increase this month could not be ruled out.
"However, we suspect that developments over the past month are unlikely to lead to at least two of the other six MPC members changing their mind at this stage and voting for more quantitative easing," said IHS Global Insight economist Howard Archer.