Economics / Markets

UK interest rates will stay at historic lows for four more years as the economy struggles to return to normal growth levels, Citi has predicted.

The Chancellor is on a collision course with bond markets over plans to change how inflation is calculated. The switch could bring the exchequer a £3.8bn windfall from a reduction in interest payments.

Senior backbench MPs are being lobbied to set up a powerful US-style committee that would scrutinise the public finances as a whole and try to head off major fiscal disasters.

A wall of cash running to tens of billions of pounds could be about to flee from government bonds into the stock market, top investors have warned.

A pair of MPs have criticised the decision to award a knighthood to Hector Sants, the former chief executive of the Financial Services Authority (FSA).

Leaders on the country's biggest firms are more confident in an economic recovery than they were a year ago but have less faith in the Chancellor, latest polling has found.

Strong data from China and a deal to avert the US fiscal cliff have helped push the FTSE 100 past the 6,000 mark for the first time since July 2011.

A leading thinktank has urged the government to take drastic steps to stimulate economic growth in the UK, as another forecast a 50/50 chance of a triple-dip recession.

2013 PREDICTIONS

US President Barack Obama has praised a deal to prevent a "fiscal cliff" of spending cuts and taxation.