Stephen Byers said during a debate in the Commons: "Certainly announcements from the Bank of England show that the balance of risks has now changed as far as inflation is concerned. So, I hope that we will see significant decisions being made over the next few weeks."
Mr Byers made clear he was being guarded in what he said because he did not want to be seen to be putting pressure on the Governor of the Bank of England, Eddie George.
His comments came during a debate on the economy, opened by the Liberal Democrats in which the Chancellor, Gordon Brown, who was not in the chamber, faced charges of having put pressure on the Bank's Monetary Policy Committee to bring down interest rates in response to the economic downturn.
Malcolm Bruce, the Liberal Democrat Treasury spokesman argued this was "compromising the operational independence" of the Bank of England.
Mr Brown also came under cross-party attack for trying to "play the blame game" over the worsening economic situation as he was warned that a further 500,000 jobs could be at risk.
Mr Byers agreed some sectors of the economy would be worse hit than others, but he assured MPs that the Government would "never forget" the human questions involved for families and companies.
Opening the first debate on the economy since the summer recess, Mr Bruce, said the Chancellor, absent for the exchanges, was yet again "ducking" an opportunity to account for the downturn. "Instead of addressing the economic problems that we are facing, the Chancellor has attempted to play the blame game. He has been arguing our economic problems can be blamed on a world economic slowdown and on incompetent, unproductive businesses and workers."
"The reality is that, net, we are losing 300 manufacturing jobs a day, and our farming industry faces a 50 per cent drop in farm incomes, and employment is declining rapidly too."
The forecast job losses would "reduce manufacturing employment to levels not seen in Britain for 150 years", Mr Bruce warned.
Instead, the Government should ensure tax policy "helped rather than hindered" the process of cutting interest rates and make an "early commitment" to join the European single currency in order to bring down interest rates to the Euro-zone level of 3 per cent.
Intervening, the Labour MP Beverley Hughes (Stretford and Urmston) said such moves could cost between pounds 30bn and pounds 60bn and would mean 20p on the basic rate of taxation.
Mr Byers said he wanted to make "an honest and realistic assessment of the state of the economy" - "acknowledging" and not "running away from the fact that within sectors certain areas were suffering hardship".
He said: "As the economic weather turns, as a storm in one region threatens to spread, there are easy but dangerous shelters - a return to protectionism, the breakdown of co-operation, the rise of beggar- thy-neighbour policies.
"But this can only make things worse and not lead to renewed growth. Protectionism anywhere is a threat to prosperity everywhere. Closing off national economies only increases national and international instability."
Warning that the productivity gap between Britain and her major competitors was "unacceptably high", Mr Byers indicated that the Chancellor would address this issue in his pre-Budget statement next week.
David Heathcoat-Amory, shadow Chief Secretary to the Treasury, claimed Mr Brown had damaged the economy by a "series of mistakes" which had made its whole economic strategy unsustainable. "It was based on a growth forecast of at least 2 per cent this year and future years. No one today believes that will happen."Reuse content