Inflation

UK CPI inflation fell from 4.8% in November 2011 to 4.2% last month, the equal largest drop since December 2008, according to the Office for National Statistics.

The Bank of England's Monetary Policy Committee (MPC) has held fire on its quantitative easing (QE) programme and kept interest rates at their historical low of 0.5%.

AXA Investment Managers' Richard Marwood says understanding how asset classes react differently to various market conditions is the key to real portfolio diversification.

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.

Bank of England chief economist Spencer Dale has predicted inflation will fall to around 3% early next year and is confident the latest round of quantitative easing will prop up the economy.

UK CPI inflation fell from 5% to 4.8% in November, the Office for National Statistics has said, in line with economists' forecasts.

The government's decision to switch from RPI to CPI to calculate annual public sector pension upgrades has been ruled lawful in the High Court.

Bank of England governor Mervyn King has accepted UK economic growth will be flat over the next six months and has given a stark warning about potential shocks from the eurozone.

Update from Kames Capital's Stephen Jones, Joint Head of Fixed Income

The Bank of England's Monetary Policy Committee voted unanimously in favour of keeping bank rate at a record low of 0.5% and maintaining QE at current levels, while warning inflation is not likely to fall as fast as expected.