All 67 analysts polled by Reuters predict the central bank's Monetary Policy Committee will keep interest rates unchanged again at the end of its two-day monthly meeting as inflation is running at more than double the central bank's 2 percent target.

The nine-member policy committee was split three ways last month. Tim Besley wanted to hike rates to make sure high inflation spread through the economy.

David Blanchflower wanted to cut rates to ease the economic pain and has since signalled that he might even vote for a half-point cut in borrowing costs this month as he thought the economy was already in recession.

The remaining seven -- led by Governor Mervyn King -- thought no change was the best option given the competing risks. A similar analysis is expected this week as soaring utility bills are likely to push inflation to near 5 percent next month.

"UK economic growth stagnated in Q2, with domestic demand suffering its second successive quarterly contraction, but this is unlikely to trigger a Bank rate cut in September," said Ross Walker, economist at RBS Financial Markets.

"The August minutes did hint at a subtle shift within the MPC -- the upside risks to CPI were judged to have eased a little' and the discussion was framed more explicitly in terms of the case for a rate cut -- and a further dovish shift seems likely in September."

Many economists say the Bank could edge toward a cut in November as inflation may have peaked by then and could be heading downwards, particularly if the recent slide in oil prices continues.

The economic data, meanwhile, continue to be grim. House prices fell another 1.9 percent last month, according to the Nationwide building society.

That is being felt right across the economy as consumer confidence crumbles and retailers and construction companies take a hit. Many say the economy could soon be in its first recession since the early 1990s

But the hawks on the MPC may still be concerned that the high headline inflation will feed into high wage demands and may want to wait for the January pay round.

While oil prices are falling, the sharp decline in the value of the pound is adding to upside inflation risks.

Blanchflower, however, is predicting sharp rises in unemployment and says that wage growth will not be a problem.

The question is whether he can convince his colleagues.