WORCESTER'S MP is urging more savers to turn to credit unions if interest rates are slashed this week - saying it may help boost spending power.

Robin Walker, who is now a Brexit minister, says the savings rates on offer may surprise people.

Amid the economic uncertainty around Brexit, the Bank of England is being widely tipped to take the bold step of cutting interest rates to an historic low of just 0.25 per cent on Thursday.

The move would be the first change to interest rates since March 2009, a significant boost for homeowners but not so good for savers.

Before joining the ranks of Government in Theresa May's new-look frontbench, Mr Walker made a name for himself across parliament in investigating payday lenders and promoting credit unions.

The Conservative told the Worcester News city householders need to be cautious about the expected cut in interest rates, saying it "cannot" remain so low forever.

"I remember when the interest rates came down to 0.5 per cent and people said 'it can't go any lower'," he said.

"It's a strange world we live in when we talk about it going lower - for people with mortgages it would be good news, but we can't pretend it will always be that way.

"If you look at the whole of history, even the current interest rate is exceptional and nobody should expect it to stay this low forever.

"But people who are savers should not be discouraged if interest rates are cut, saving is a good thing.

"It's actually a good opportunity for people to look at a credit union savings account because that's one way to get a good rate."

Economic experts said this week that UK manufacturing activity has fallen to its lowest level in more than three years, with suggestions the industry is starting to contract.

Gloomy forecasts from the service industry and lenders has also led to predictions the Bank of England Governor Mark Carney will cut rates to the new low, after holding firm last month.

The bank's Monetary Policy Committee publishes its decision on Thursday and all but three of 49 leading economists expect it to cut borrowing costs to boost the post-Brexit economy.

The Bank of England's inflation report, also published on Thursday, is expected to slash its forecast for 2016 economic expansion from 2.3 per cent to less than one per cent - the biggest downgrade since it become independent in 1997.