The Bank of England holds a regular policy meeting this week amid market uncertainty over whether Britain has returned to growth in the third quarter in the wake of poor manufacturing data.

The BoE was forecast to announce no changes to its main interest rate and stimulus programme at the conclusion of its two-day monthly meeting ending on Thursday, despite data this week that has weighed on Britain's growth outlook.

While just last week many analysts said they expected Britain to have exited a deep recession in the third quarter, or July-September period, data on Monday led many to believe that the non-eurozone country may be stuck in a downturn.

The latest CIPS/Markit purchasing managers' index (PMI) for the manufacturing sector showed output contracted further in September. The reading for last month stood at 48.4, compared with 49.6 in August. A level below 50 indicates that the sector is shrinking.

The “data presented a uniformly weak picture of economic activity and will therefore go some way to dampening hopes that the 'green shoots' of recovery are emerging,” said Samuel Tombs of Capital Economics research group.

Against such a backdrop, the BoE was on Thursday expected to vote to keep its key lending rate at an all-time British low point of 0.50 percent, where it has stood since 2009.

Also since this time, the central bank has pumped £375 billion ($606 billion, 469 billion euros) of new cash into the economy under its quantitative easing (QE) stimulus programme.

Analysts expect the BoE's Monetary Policy Committee to hold back from announcing an increase to QE following its latest meeting.

Under QE, the Bank of England creates cash that is used to purchase assets such as government and corporate bonds with the aim of increasing lending by retail banks and boost economic activity.

Britain escaped a deep downturn in late 2009 but fell back into recession at the end of 2011. On a positive note, its economy shrank by slightly less than thought in the second quarter compared with output in the first three months of the year, recent official data showed.

Gross domestic product (GDP) contracted by 0.4 percent between April and June compared with the first quarter.

The Conservative-Liberal Democrat coalition government blames Britain's economic ills on the debt crisis in key trading partner the eurozone and on the high level of debt inherited from the previous Labour administration.

But the main opposition Labour party claims that Britain's downturn is mainly a result of hefty cuts to state spending by the coalition that have resulted in thousands of job losses across the civil service. - Sapa-AFP