WAR in Iraq has already started denting the global economy, data and reports showed yesterday, stoking fears of even greater damage ahead as the chances of a protracted war seemed to be rising.

BRITISH inflation remained above its 2.5% target for the third month in a row in January, but this is unlikely to prevent the Bank of England cutting interest rates again if growth takes a turn for the worse.

With attention focused on the launch of euro cash, the European Central Bank is today expected to avoid further excitement and leave key interest rates unchanged for the 12 countries using the new currency, economists say.