LONDON (MktNews) - Economic data released this week havecalled into question just how rapidly the UK economy is slowing butit still remains likely that the Monetary Policy Committee will vote tocut the repo rate by 25bps on Feb.8. Rather ironically, just when services growth appears to beslowing, the manufacturing sector seems to be gaining a new leaseof life. One shouldn't overstate the strength in manufacturing, it's notexactly booming, but recent survey evidence does suggest theoutlook is improving. The CIPS manufacturing index rose to 52.0 in January from 51.3in December, the highest level since January 2000. Moreover, theprices balance rose to 58.6 the highest since July 2000. Thesenumbers correlate well with recent more upbeat evidence from theCBI also. Other data reveal that consumer activity still remains buoyant.The CBI Distributive Trades Survey for January revealed that thebalance of reported sales jumped to +36, with the expectations indexalso coming in at a high level. Coupled with news from theNationwide that house prices rose 2.5% on the month in January,one could be forgiven for asking just why the Bank of Englandshould cut rates next week. Of course there is evidence of slowdown. The labour market isextremely tight but pressures seem to be easing. Moreover, eventaking into account special factors, GDP growth weakened in Q4, withservices growth slowing towards trend. However, the principal reason that rates are likely to be cut nextweek is the fear of a slowdown in global growth and a possible dropin confidence caused by uncertainties in the US. Also, inflation is sobenign, trimming rates now poses few inflationary risks. At the January MPC meeting, these arguments were put forwardby the four members of the MPC who voted for an immediate cut inrates. At that time they were unable to convince their five othercolleagues (including BOE Governor Eddie George) to join the party. However, the hawks judged that it would be sensible to waitrather than cut rates immediately because a move so soon after theFOMC's decision to ease policy might give a misleading signal andactually damage confidence. Enough water has surely run under thebridge since then, and given that the markets are clamouring for aneasing of policy, the hawks are now likely to be more worried thatconfidence will be damaged if rates are not cut.