Inflation

Inflation fell by much less than analysts had expected to 3% in January.

Inflation fell sharply in December, down to 3.1%, as retailers slashed prices in a desperate bid to encourage Christmas shoppers.

A heavy-handed response to regulating the financial services sector could lead to unintended consequences, according to Monetary Policy Committee (MPC) member, Andrew Sentence.

Deflation is unlikely to pose the same risk to Western economies as it did to Japan in the 1990s, according to Schroders' chief economist, Keith Wade.

October saw the biggest month-on-month fall in UK inflation since 1992, official statistics reveal.

The UK economy "very likely" entered a recession in July, the Bank of England says, sparked partly by a banking crisis it calls the "worst since the outbreak of the First World War".

The Bank of England may set interest rates as low as 2% by the end of 2009 to prevent a dangerous deflationary cycle, according to Tim Drayson, economist at Legal & General Investment Management (LGIM).

Consumer inflation continued to stretch away from the Government's target in September after huge rises in gas and electricity bills.

A UK recession is already well underway and the Government needs to slash interest rates immediately to avoid "huge damage" to the economy, the British Chambers of Commerce (BCC) warns.

The UK is likely to suffer a recession over the next twelve months, but it will be mild in comparison to those of the past, according to Andrew Sentence, a member of the Monetary Policy Committee (MPC).