There is a "real chance" the Bank of England will raise interest rates as early as next week, says Skandia, with subsequent hikes pushing rates up to 3% by the end of next year.
Martin Weale has called for an immediate 0.25% increase in the Bank of England (BoE) base interest rate, echoing the view of Monetary Policy Committee (MPC) hawk Andrew Sentance.
China has offered support to the eurozone to help it through the debt crisis that has gripped the region.
Sterling touched a three-month low against the dollar before rebounding as the Monetary Policy Committee (MPC) revealed continued division on interest rates while UK growth was revised down.
The Monetary Policy Committee's (MPC) Adam Posen has warned the Bank it should not try to compensate for its past mistakes in underestimating inflation by pushing up interest rates.
The Bank of England's nine-member Monetary Policy Committee (MPC) was split three ways over the direction of monetary policy at their November meeting, according to minutes of the gathering.
Inflation is likely to remain high throughout 2011 but the Monetary Policy Committee (MPC) is more divided than usual over the reasons why, the Bank of England Governor says.
The Bank of England today rejected a fresh bout of quantitative easing and kept interest rates on hold for the 20th consecutive month.
The FTSE 100 opened positively in a week set to be dominated by a slew of US economic and political news.