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The Bank of England's monetary policy committee is expected to chop at least half a percentage point off interest rates today, which would take borrowing costs to the lowest in more than 300 years.
Having voted unanimously for three consecutive cuts in October, November and December, which took rates from 5% to 2%, the MPC is widely expected to lower them again at the end of its monthly meeting at noon today.
Any reduction would take borrowing costs to the lowest since the Bank was founded in 1694 and move it closer to the point where radical action such as quantitative easing - pumping money into the economy in a bid to get people and businesses spending again - becomes the only option to prevent deflation.
The Bank's deputy governor Sir John Gieve has admitted that the central bank previously severely underestimated the severity of the economic slump, and the bad news keeps coming.
Unemployment has shot up, the slump has spread from manufacturing and construction to services, and the number of business failures on the high street is growing by the day, including well-known retailers like Woolworths.
The minutes of last month's meeting revealed that while the committee voted unanimously for a reduction of a full percentage point, they considered the case for a larger reduction.
The committee may struggle to preserve its unity this time as some members are known to be very concerned about the economic outlook and may push for a bigger reduction than the rest.
David Blanchflower has repeatedly highlighted the bleak outlook for the labour market. In a Royal Economic Society paper in mid-December, the labour market expert said he expected unemployment to keep going up this year and into 2010, probably rising over 3 million.
"Where is the light at the end of the tunnel? I can't see any," he said.
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