Manchester to Milan used to be served twice daily by BA till 98, when KLM UK started a new (twice daily) service in codeshare with Alitalia (and with fairly more convenient schedule).
Alitalia withdrew from the code share after six months, much to disappointment of KLM UK (source: a flight attendant, maybe not reliable...).
The reply of BA was to introduce a third daily service, with an Embraer 145 (British Regional). Two weeks ago the service became a "full" BA one, with a 737-500.
The route seems to be quite profitable then, unless...it is a defence move against BMI, trying to feed the new Star hub of Manchester with passengers from Northern Italy, thus entering in this route.
The Milan route is very strong on business passengers (the service during week ends is much reduced), so who knows?!