What the Bank of England has to weigh up this week

LONDON (Reuters) - The Bank of England is expected to cut interest rates to 4.75 percent from 5.0 percent on Thursday due to the bad economic outlook and despite inflation running at more than twice the official target.

A Reuters poll showed 49 out of 62 economists expect interest rates to fall this week as Britain edges closer to its first recession since the early 1990s.

Below are a range of points likely to feature in the Monetary Policy Committee's discussions.

FINANCIAL MARKET CRISIS

The credit crunch has deepened considerably in the last month, with the nationalisation of Bradford & Bingley and the private-sector rescue of Britain's biggest mortgage lender HBOS.

Financial markets and the wider public are rattled and interbank lending rates remain high even though central banks have been pumping cash into the system.

Economists say a series of rate cuts, while unlikely to cure the credit crunch, would provide a much-needed confidence boost to the economy.

INFLATION

The big factor that might stand in the way of rate cut this week is the fact that inflation is at 4.7 percent -- more than twice the 2 percent official target.