House prices in the UK slumped in November by their biggest monthly rate in nearly a year - increasing pressure on the Bank of England to cut interest rates today.
The MPC has received mounting calls in the past few weeks to ease pressure on the economy and halt fears of recession by agreeing a drop of at least 0.25 per cent.
However, speculation is that the committee will opt for the status quo, although the vote could be closer than last month when meeting minutes revealed a seven-to-two split in favour of maintaining the 5.75 per cent rate.
Analysts were wavering yesterday although the majority still favoured the rate staying the same.
Matthew Sharratt, UK economist at Bank of America, said: "I'm forecasting rates to stay unchanged but the latest data has changed the outlook significantly and I can't pretend I'll feel comfortable waiting for the announcement."
A firm stance by the MPC is likely to keep the housing market dormant and disappoint business leaders and high street retailers hoping for an early Christmas present.
Figures released by the Halifax - the country's biggest mortgage lender - yesterday revealed that house prices fell 1.1 per cent last month, the biggest drop since the 1.3 per cent fall last December.
The average house price, on a seasonally-adjusted basis, now stands at £194,895. Latest figures by the Land Registry show that the average cost of a home in the West Midlands is £180,829.
November's drop was the third in a row and was unexpected. It is the first time that there has been a three month successive fall since 1995.
In annual terms, house prices were 6.3 per cent higher, the lowest rate since March 2006. November's rate was down on the 8.9 per cent recorded in October.
Despite the fall, Halifax, part of the HBOS banking group, downplayed fears that the market was heading for a crash but conceded it is more subdued.
Chief economist Martin Ellis said: "The UK economy is in sound shape. Strong market fundamentals, a structural housing supply shortage and pent-up demand from a large number of potential first-time buyers will support house prices, preventing a sustained and significant fall."
He said a mixed pattern of monthly price rises and falls was a typical feature of a more subdued housing market, noting that there were six monthly falls and six monthly increases between July 2004 and June 2005 as the market slowed in response to a series of interest rate rises during 2004.
Tougher lending conditions, falling confidence and financial market turbulence is now raising concern that the housing market could enter a more prolonged downturn.