Inflation

European Central Bank president Jean-Claude Trichet has hinted the ECB may be forced to raise interest rates as early as next month to curb significant recent inflation increases.

House prices fell 2.4% in May, according to the Halifax, providing further evidence that the UK housing boom is over.

The Federal Reserve has signalled its intent to shift its focus to fight the increasing dangers of inflation and the low US dollar.

Pensioners with fixed rate annuities risk losing around a fifth of their purchasing power over the next five years due to rising inflation, according to Aon Consulting.

Any hopes of further US interest rate cuts have been dampened after the Federal Reserve admitted to heightened concerns surrounding rising inflation.

UK inflation, on an annualised CPI basis, could hit a staggering 7% if it continues to run at the current rate, Rathbone Unit Trust Management CIO Julian Chillingworth believes.

Government ministers believe UK house prices could fall by up to 10% this year it was revealed in a leaked Cabinet briefing note.

A 4% annual inflation peak now looks "plausible" as today's jump to 3% appears too low against economist's predictions for the rest of the year, New Star chief economist Simon Ward says.

The UK housing market has continued to weaken, with ever larger numbers of surveyors reporting house price falls, according to the Royal Institute of Chartered Surveyors (RICS).

The Bank of England's Monetary Policy Committee (MPC) has decided to keep interest rates at 5%.