Economics / Markets

(Updated 11:15am) The FTSE 100 is trading more than 1% higher in mid-morning trading on Tuesday afte closing 2011 down 5.5% for the year.

The eurozone could start to break apart this year with countries including Italy and Greece potentially exiting the single currency, a leading think-tank has warned.

Markets have struggled to gain further ground after the European Central Bank announced it had lent almost €500bn to banks in a three-year liquidity operation.

Members of the Bank of England's Monetary Policy Committee (MPC) voted unanimously to hold rates at their historic low and maintain the quantitative easing (QE) programme at £275bn - but they indicated more QE could be on the way.

Ratings agency Moody's has warned the UK's prized AAA rating is at risk from the eurozone crisis despite the austerity measures taken to help retain its current status.

Prudential have announced that chairman Harvey McGrath is to retire from the board of directors in 2012 once a successor has been found.

The eurozone faces a "mild" recession in the first half of next year, restricting full-year economic growth in the region to just 0.1%, according to Ernst & Young.

Heavy selling of the euro saw it tumble through the $1.30 mark versus the US dollar late this morning to its lowest level since early January.

UK unemployment rose by 128,000 in the three months to October to 2.64 million, the highest level since 1994.

Markets around the world closed down overnight as further signs European leaders will fail to agree a new treaty emerged.