Inflation

Chancellor Gordon Brown is expected to give the Bank of England the green light to increase rates next week, despite the official inflation rate threatening to drop below the 1% level at which point the Bank must write to the Treasury explaining its policy...

The UK property market is heading for new highs as annual house price inflation hit its highest pace since October 2002, suggests lthe atest survey by the Royal Institute of Chartered Surveyors.

Is inflation rising or isn't it? The question highlights an increasing split between the government view of prices and what the Bank of England sees in relation to the ‘old' measure of inflation, the retail price index.

The average UK house burst through the £150,000 price level in March, thanks to monthly house price inflation of 2.2%, which took annualised inflation to 18.5%, Halifax says.

Property prices are seeing a resurgence and are now expected to rise an average 15% this year or at least 10% in the capital, suggests the latest house price update from Nationwide.

Gordon Brown may have outlined the case for growth in his Budget yesterday, but more evidence has been published today supporting the case for further interest rate rises, which could put the squeeze on consumer spending.

The UK housing market is steaming ahead full pelt according to a troika of surveys just out, which will more than offset news inflation as measured by the government's preferred index fell last month.

This year's investment story will be equities mixed with bonds because people will be more interested in avoiding losses than taking on risk to back winners, says Phil Wagstaff, managing director UK retail M&G.

There still seems to be no slowdown in house price inflation, according to the latest Nationwide house price update, as property values rose another 3.1% in February.

ISIS Asset Management says corporate earnings in the US should stay strong through this year, but adds there are still dangers in the form of continued high unemployment and the weak dollar.