Economics / Markets

Royal Bank of Scotland (RBS) has posted a pre-tax loss of £2.2bn in the fourth quarter, taking full year 2012 losses to £5.2bn, but despite the results the bank said the government is much closer to selling its stake.

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UK GDP contracted 0.3% in the last quarter of 2012, according the second reading of the data.

The Bank of England's deputy governor, Paul Tucker, has raised the prospect of introducing negative interest rates to boost lending and support the UK economy.

European bond and stock markets saw a sharp sell-off on Monday after a shock result from the Italian election, where no political group managed to win a majority vote.

Taxpayers could face a £100 bn bill for the loss of Britain's much-prized AAA credit rating. The staggering sum, equivalent to 5p on the basic rate of income tax, comes from the Treasury's own forecast for a worst-case scenario.

Moody's has stripped the UK of its AAA credit rating on fears over rising government debt and years of slow economic growth ahead.

The Bank of England has revealed it is in talks with the People's Bank of China about agreeing a currency swap deal to help ensure greater financial stability.

The FTSE 100 tumbled nearly 2% in morning trading after the US Federal Reserve spooked markets yesterday by warning it may slow its asset purchase programme.

The pound has moved towards a year low yesterday against the dollar, its recent weakness having been exacerbated by the revelation Bank of England (BoE) governor Sir Mervyn King voted for further stimulus this month.