Barclays Capital is urging the Bank of England's Monetary Policy Committee to cut interest rates by at least 0.25 per cent when it next meets.
Barclays is urging the MPC to make the cut because it is predicting that quarterly growth annualised in the service sector is going to be less than 1.5 per cent in 1999.
It says that weakness in this sector combined with a deterioration in the international environment is causing the economy to slow down rapidly.
Fund manager Capel Cure Sharp is also calling for the MPC to cut rates by at least 0.25 per cent.
It says that the MPC has to respond to the nationwide deterioration in the manufacturing industry and the Bundesbank's decision to cut rates.