The Bank's Monetary Policy Committee is expected to use its meeting today to commit to spending billions more on gilts as it aims to pull the UK economy out of recession and to bring long-term interest rates down. The move comes amid growing speculation that the Bank is quietly considering cutting back the amount of money it is planning to create though quantitative easing.

For the first time since the Bank was granted independence to set interest rates in 1997, interest rates will no longer be the main focus of attention on an MPC decision day, with the committee almost certain to leave Bank rate at its current historical low of 0.5pc. Instead the attention will be concentrated on what it says about the quantitative easing programme, upon which it first embarked a month ago.

Under the scheme, the Bank is creating money and using it to buy £75bn worth of bonds – mainly government debt – in its first three months of operation. When it was first unveiled, the Bank indicated that it was prepared to spend a further £75bn if deemed necessary.

However, two weeks ago comments made the Bank's governor Mervyn King suggested that the Bank would pause if necessary and may not spend the full £75bn. The Governor's remarks contributed to the first failure of a Government bond auction since 1995 as confused traders fled the gilts market.

However, Bank insiders have since indicated that Mr King remains fully behind the plan to buy up a significant proportion of the gilt market. This is something the committee is likely to affirm today.

Michael Saunders, economist at Citigroup, said: "The MPC might in theory face a difficult choice in coming months of whether to continue with quantitative easing and expand it if long-term inflation expectations rise sharply while economic growth is weak. But that dilemma does not exist yet."

The MPC is likely to defer a decision on whether to proceed with the second £75bn wave of quantitative easing until its May or June meeting, which would allow it time to judge the impact of any fiscal measures announced in the Budget on April 22.

The Chancellor will be forced to sharply downgrade his forecasts for economic growth, after predicting at the pre-Budget report in November that gross domestic product (GDP) would fall by just 1pc this year.

Those projections were dismissed as overly optimistic as soon as he made them, and the economic picture has continued to deteriorate since then.

In a Reuters poll published yesterday, more than 40 economists forecast that the UK economy would shrink by 3.6pc this year. The median estimate was much worse than the 3pc drop they expected just a month ago, although better than the 3.8pc contraction forecast by the International Monetary Fund.