GLOBAL markets are set to recover but the euro, just above parity against the dollar in recent days, is expected to fall sharply against the US currency, according to a leading economist.

JITTERY stock markets and a strong euro rule out a rise in European Central Bank interest rates next week, economists said in a Reuters poll, and an increasing number say rates could stay on hold until next year.

Britain's economists have welcomed the Bank of England's decision to keep interest rates at 5.75%.