Two sets of economic figures released today - on borrowing by homeowners and on manufacturing output - have added to pressure on the Bank of England just as its Monetary Policy Committee began its two-day, monthly meeting to discuss interest rates levels.

Members of the committee will state tommorrow at noon whether they will cut the cost of borrowing from 4.75 per cent.

Despite two committee members, including the highly influential Charles Bean, voting in favour of a 0.25 per cent cut in the base rate last month, economists have been predicting the Bank will shy away from the cut this time, but will act at next month's meeting.

The Bank of England revealed this morning that British homeowners had borrowed £6.4 billion secured against the value of their properties for spending not related to property buying during the first quarter of the year.

The slump in mortgage equity withdrawal represents a fall of nearly £2 billion on the Bank of England's revised figure for the fourth quarter last year of £8.3 billion.

It means that the level of mortgage equity withdrawal, which acts as a useful barometer of British consumer confidence, is now running at its lowest level for almost four years.

Until the fourth quarter, homeowners were last year releasing comfortably more than £12 billion of equity per quarter.

Howard Archer, the chief UK economist at Global Insight, said of the Bank of England's figures: "It is clear that the slowdown in the housing market and higher interest rates have markedly reduced individuals' scope and desire for mortgage equity withdrawal.

"Indeed, it was at its lowest level in the first quarter of this year since the third quarter of 2001 and was some 60 per cent lower year-on-year.

"This is undoubtedly weighing down markedly on consumer spending, even though a Bank of England study last year suggested that mortgage equity withdrawal had played only a limited role in financing consumption."

At the same time, the Office for National Statistics released seasonally adjusted figures that showed that manufacturing output during the three months to May was 1.9 per cent down on the previous period.

The statistics office said that industrial production as a whole was 1.3 per cent lower in the quarter to May, despite a 0.9 per cent increase in mining and quarrying and a 1.2 per cent jump the gas and water supply industries.

It also said that there had been a "significant rise" in output in the food, drink and tobacco industry sectors.

Describing the underlying growth in manufacturing in May as "dismal", economists at Lehman Brothers said that, month on month, manufacturing output was slightly stronger than it had expected. But they said the three-month rolling comparison was weaker than they had predicted.

Mr Archer said of the manufacturing figures: "This maintains pressure on the Monetary Policy Committee for an early interest rate cut, although we think it is more likely that they will move in August rather than tomorrow."

A quarter of homeowners had to accept offers that were 5 per cent below their asking price, and 30 per cent sold their homes for between 5 and 10 per cent of the price they had hoped to get.