The Bank of England voted 8-1 to cut interest rates by 0.25% at the beginning of the month it has been revealed.
Ron Sandler, the new executive chairman of Northern Rock, insists the bank can be returned to the private sector in time.
GDP growth could fall to 1.5% by the end of 2008 according to the Bank of England's latest inflation report.
Rising fuel and food costs have pushed UK inflation up to 2.2%, according to the latest figures from the Bank of England.
The UK will slow this year but avoid recession, according to economists at Norwich Union.
The Bank of England's Monetary Policy Committee (MPC) has cut interest rates by a quarter of a percentage point to 5.25%.
Richard Branson's Virgin Group has placed the highest bid for Northern Rock, it was revealed last night.
Olivant, the investment vehicle headed by former Abbey boss Lugman Arnold, has pulled out of the bidding race for Northern Rock.
Bidders are expected to submit their formal proposals to takeover Northern Rock ahead of today's deadline.
The Bank of England will follow its US equivalent's lead and cut interest rates this month, the Association of Mortgage Intermediaries (AMI's) quarterly report predicts.