Inflation

Inflationary pressures are greater than the MPC painted in its latest report and higher interest rates are urgently needed, says the MPC's Andrew Sentance.

L&G Investment Management (LGIM)'s multi-manager team is moving its equity focus away from emerging markets towards the US and other developed economies.

Sterling fell against the dollar and the euro after the Bank of England downgraded its economic growth forecast for 2011.

Ben Lord, co-manager of the M&G UK Inflation Linked Corporate Bond fund discusses this week's inflation figures and the impact of interest rate hikes.

A series of quarter-point interest rate hikes will begin in May, according to analysts examining Bank of England governor Mervyn King's latest obligatory letter to the Chancellor.

The latest inflation figures, showing CPI reached 4% in January, has sparked speculation on higher interest rates and the impact on the UK economy.

The UK inflation rate rose to 4% in January, which is double the government's target and up from 3.7% the previous month.

Official inflation figures due out today are misleading the public, according to international experts who say the data understates the true increase in the cost of living.

HOW WILL VAT HIKE AFFECT INFLATION?

Emerging markets are set to continue delivering higher growth and lower volatility than developed markets, with EM equities to return more than 10% per year until 2015, says Barclays Capital.