Economics / Markets

Economists say the sharp drop in inflation announced today could justify a further round of quantitative easing by the Bank of England.

The governor of the Bank of England, Sir Mervyn King, has insisted he did not call for Bob Diamond's scalp before Barclays' former chief executive stepped down.

The former chief operating officer of Barclays, Jerry del Missier, has told MPs Bob Diamond instructed him to lower the bank's LIBOR submissions, on the orders of the Bank of England's deputy governor Paul Tucker.

The International Monetary Fund (IMF) has cut its forecasts for UK GDP growth for both this year and next as it warns of a "ratcheting up" of financial market and sovereign stress in the eurozone periphery.

FIVE THINGS

Bosses at Barclays, including outgoing chairman Marcus Agius, have written to staff to calm fears over the LIBOR scandal, telling them other banks face similar punishments.

Latest forecasts suggest the economy will return to growth over the next six months, boosted by falling inflation and a pick-up in consumer spending.

Head of the Financial Services Authority (FSA) Lord Turner is expected to be criticised by MPs today over the watchdog's slow reaction to LIBOR abuses, according to reports.

Warren Buffett has spoken out about the rapidly deteriorating state of the European economy, warning that there is no obvious answer to the region's problems.

Imminent plans for another round of US quantitative easing were ruled out yesterday following the publication of the US Federal Reserve minutes, disappointing markets.