Economics

The UK may have to fork out £17.5bn to plug a funding shortfall at the International Monetary Fund (IMF) after the organisation warned yesterday it needed additional funds to tackle the eurozone crisis.

M&G Investments bond manager Richard Woolnough has revealed he is currently favouring US treasuries over gilts, as the latter are already priced for more quantitative easing.

The World Bank has warned developing countries to prepare for the "real risk" of the deepening eurozone crisis tipping the world into a post-Lehmans style recession.

The FTSE 100 opened lower this morning despite recent positive economic data, as rumours of a Fitch downgrade of Italy weighed on markets.

Fears we are facing a period of prolonged inflation are "unfounded", said Monetary Policy Committee (MPC) member Adam Posen, speaking on a day when UK inflation dropped sharply.

Italy's will struggle to finance itself until borrowing costs fall back towards the 4% level, according to Goldman Sachs Asset Management chairman Jim O'Neill.

Henderson's Chris Burvill has forecast global equities could rally by as much as 20% in 2012 if more positive economic data continues to be seen from major economies.

US investment banking giant Citigroup saw its shares tumble in early afternoon trading after the group revealed a fall in profits and sliding revenues.

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S&P's latest raft of downgrades were largely priced into markets, but more worrying is its forecast of a high chance of a deep recession in the region, said Schroders' European economist Azad Zangana.