Inflation

COULD IRELAND BE THE RECOVERY PLAY OF 2012?

The Bank of England's Monetary Policy Committee (MPC) has increased its quantitative easing programme by £50bn as it looks to shore up the UK's ailing economy.

Chinese inflation jumped in January after a straight run of five monthly declines due to seasonal factors.

ASHBY'S ANSWERS

The Bank of England's Monetary Policy Committee (MPC) once again voted unanimously to maintain interest rates at 0.5% and keep the quantitative easing (QE) programme at £275bn in January, despite fears inflation may fall below target levels.

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.

UK CPI inflation fell from 4.8% in November 2011 to 4.2% last month, the largest drop since December 2008, according to the Office for National Statistics.

The UK and the US could be dragged into a eurozone-style sovereign debt crisis if they waver on austerity plans, said Invesco's John Greenwood.

The UK has sold £700m of long-dated index-linked gilts for a negative real yield of 0.116%, the lowest level ever recorded.

Bank of England chief economist Spencer Dale has predicted inflation will fall to around 3% early next year and is confident the latest round of quantitative easing will prop up the economy.