CPI

Strategists have predicted inflation will fall back to target in the New Year when the VAT rise is stripped out of figures, freeing the Bank of England to pump in more money to stimulate the economy.

China's attempts to cool rising prices have begun to have an impact, as inflation slowed in August after hitting a three-year high the previous month.

Price pressures across a number of areas have seen UK CPI annual inflation rise from 4.2% in June to 4.4% in July.

Schroders' Louisa Lo says a drop in exports will see Asian markets affected by the Western downturn.

ON BONDS

Barack Obama has pleaded with Congress to come up with a compromise to raise the country's debt ceiling and stave off default, reports the FT.

Chinese equities will bottom out this year, according to Mansfield Mok, manager of the £1.2bn GAM Star China Equity fund, who also forecasts China's central bank will loosen its monetary policy in the second of half of this year.

UK consumer price inflation fell from 4.5% in May to 4.2% in June despite food prices remaining high.

The UK has spent the last few days discussing how to pay for retirement and old age.

Ronald Reagan claimed inflation was as "violent as a mugger, as frightening as an armed robber and as deadly as a hitman."