The Confederation of British Industry said the bank had missed the chance to shore up sliding confidence as gloom spread through the housing market and consumers held back on spending.

“While the economic situation is not desperate, it is clear that manufacturing is teetering on the verge of recession, the retail sector is under considerable pressure and the housing market is stagnant,” it said.

The National Institute of Economic and Social Research said rates “should now be reduced”, releasing fresh survey data showing the British economy grew by just 0.3pc in the three months to June.

Two members of the Bank of England’s monetary policy committee voted for a cut at the June meeting, including the chief economist Charles Bean.

But a 9pc fall in sterling against the dollar and Chinese yuan since mid-May has changed the picture dramatically, giving British industry a major shot in the arm and boosting UK company profits from operations in America. The inflationary outlook may no longer be quite so benign.

There were signs yesterday that the British property market may at last be stabilising after a grim patch since the boom peaked last year.

The Halifax survey said house prices edged up 0.1pc in June, bringing the average price to £162,605. But the annual rate of growth has fallen to 3.7pc, the slowest in four years.

Martin Ellis, Halifax chief economist, said the market had been underpinned by rising loan approvals for five months in a row. “The economic fundamentals underpinning the housing market are sound. Earnings growth is robust. The UK economy continues to grow with the number in employment at a record high, and mortgage payments are very close to their long-time historical average,” he said.

Prices continued to slide in Greater London (-1.1pc), the South East (-1.2pc), and East Anglia (-1.6pc), but the overall index was boosted by robust figures from Wales (+4.6pc), and Northern Ireland (+3.5pc).

The Halifax survey does little to clear the murky picture on British property.

Hometrack, which relies on data from agreed sales rather than mortgage approvals, said prices had fallen 3.6pc over the last year.

Rightmove.com warned recently that it could take seven years of “static prices and wage inflation” for the British property market to burn off the excesses of the past boom.

Halifax said earnings growth of 4.6pc was outstripping annual house prices for the first time since early 2001 and will soon push the ratio of prices to incomes below 5.5.

The North-South gap in prices has narrowed a further £10,000 over the last year as the slowdown bites deeper in London and the Home Counties.