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The City is braced for the Bank of England to call a halt to its emergency programme of money creation after pumping £200bn into Britain's struggling economy over the past year.

Despite signs that January's arctic weather conditions affected output from the servic..., the Bank's nine-strong monetary policy committee is expected to announce a temporary suspension to gilt purchases through quantitative easing tomorrow. The bank's base rate is likely to remain unchanged at 0.5%.

Some on the MPC – including the Bank's chief economist, Spencer Dale, and one of the external members, Andrew Sentance – have already signalled
their belief that it is now time for the Bank to adopt a "wait-and-see"
approach to QE.

But concerns from other policymakers – including the Bank's governor, Mervyn King – about the fragility of the recovery have led to speculation that the committee could be split over the
future of the asset purchase scheme.

Nick Parsons, head of strategy at NAB Capital, said he expected the MPC to suspend quantitative easing rather than announce the end of the scheme.
"Policy­makers should retain as much freedom as they can. They can take
time to assess its impact and revisit QE in May, once the result of the
election is known."

Hetal Mehta, senior economic adviser to Ernst & Young's Item Club forecasting group, said: "The only thing that may have convinced the MPC to ramp up the programme would have been a
negative GDP figure. However, now we are technically out of recession,
it is unlikely that the QE programme will continue."

Figures released by the Office for National Statistics last week showed that the UK economy grew by 0.1% in the final three months of 2009, its first growth since early 2008. Sentance believes that the official data underestimates the strength of
the economy and that growth will be revised up in the coming months.

However, hopes that January's bounce in the manufacturing sector would be mirrored in the service industries were dashed today when one closely
watched survey, the Chartered Institute of Purchasing and Supply's
purchasing managers' index (PMI), fell to 54.5 in January, from 56.8
the previous month. A mark above 50 signifies growth as opposed to
contraction. Analysts had forecast a reading of 56.5 for the UK's
powerhouse sector, which includes transport and communication,
financial advice, IT and the hospitality trade.

This was in contrast to Cips's manufacturing figures, released this week, which showed that sector grew at its fastest pace in 15 years last month.

David Noble, Cips's chief executive, said the heavy snow that paralysed Britain in January had probably been a factor in the drop in the
services PMI. "This may be a temporary blip caused by one-off events
rather than signs of a double-dip recession, but we can't dismiss the
possibility.

"The chaos caused by the snow hit this sector particularly hard, much more than manufacturing or construction, reducing the growth rates of activity and new business wins."

However, he added that in spite of the snow, he was seeing a positive turnaround on a number of fronts. "At ground level, employment is moving closer to
a level of stabilisation and there's even evidence of recruitment in
the financial sub-sector. And it seems the VAT increase, coupled with
growing confidence and demand, has encouraged some firms to raise their
output prices slightly.

"Even with imminent tax increases and government spending cuts, confidence in the future is buoyant as wider economic pick-up is expected to offset any fiscal austerity to come."

Jamie Dannhauser, an analyst at Lombard Street Research, said: "A majority of MPC members may not be convinced of the need for an expansion of [QE]
this month; but the near-unanimous expectation among City economists of
'no change' suggests the markets may be underestimating the chance of a
surprise tomorrow. Our bias is for the MPC to announce an additional
round of asset purchases, albeit with dissent on the committee."

David Kern, chief economist at the British Chambers of Commerce, said: "It would be premature to start reducing the QE stimulus, and it is
certainly much too early to contemplate any near-term interest-rate
rises. The main priority must be to avoid a double-dip recession."