Economics / Markets

Consumer price inflation remains well above the government's target after reaching 3.3% in November.

The FTSE edged 0.1% lower to 5,853.66 points in early trading as company-specific news guided price moves.

The FTSE has advanced to within touching distance of its 12-month high reached last month as M&A activity boosts the index in its last full trading week before Christmas.

The Shanghai Composite surged 2.9%, its biggest advance since mid-October, as China held interest rates steady despite rising inflation.

The chances of the euro breaking apart or disintegrating completely have been put at "one-in-five" by one of the UK's leading economics consultancies.

A preliminary deal has been reached for the Icelandic government to repay funds to the UK and Dutch governments lost from the collapse of Icesave.

The Bank of England has held interest rates at 0.5% and left unchanged its quantitative easing programme at £200bn.

The Government is sitting on a war chest worth billions of pounds that could be used to help reduce the national debt or finance new spending plans.

Ireland has unveiled the most draconian budget in its history with €6bn of cuts and public sector pension reductions ahead of an expected €85bn bailout from the EU and IMF.

The FTSE advanced 40 points in early trading on Tuesday as investors were buoyed by news of US tax cuts, but European debt fears were keeping a lid on sentiment ahead of the Irish budget.