Federal Reserve

Minutes from the Federal Open Market Committee (FOMC)'s June meeting reveal members are divided over whether a third round of quantitative easing is the best option for the US economic recovery.

Sir John Gieve, the former deputy governor of the Bank of England, has called for the MPC to scrap plans for further quantitative easing or else risk a 20% devaluation in sterling and higher inflation for longer.

The FTSE has opened in negative territory after a gloomy assessment of the US economy pushed European shares lower.

The Federal Reserve has scaled down its growth forecast for the US in the face of higher energy costs and weak manufacturing data.

ALL DOOM AND GLOOM IN THE US?

The end of QE2 this month will have a limited impact on the global economic recovery, according to two senior economists at Schroders.

Federal Reserve chairman Ben Bernanke has warned of a Lehman-style meltdown if the US Congress uses the national debt limit as a "bargaining chip", the BBC reports.

The UK could fall back into recession at the end of this year, as high oil prices and the impact of the Japan earthquake weigh on global economic growth, said Fidelity's Trevor Greetham.

A third round of quantitative easing in the US would lead to the collapse of the dollar, M&G's Jim Leaviss has warned.

Threadneedle's Cormac Weldon has cut his GDP forecast for the US this year as soaring fuel costs threaten to cripple consumers.