Bank of England Governor Mervyn King mounted a defence of the central bank’s forecasts today as he warned the UK economy would be “far from normal” for some time.

Bank of England Governor Mervyn King will send a letter of explanation to the Chancellor today when figures show a spike in inflation above 3%.

Bank of England Governor Mervyn King said today that the ailing UK economy continued to “bump along the bottom”, although he held out hopes for a “gradual recovery” in output.

Disappointing news on the US economy dampened the London market's recovery today in the wake of yesterday's near-2% rise.

Hopes from the Bank of England that the UK economy may be over the worst of its slump helped the FTSE 100 Index gain ground today.

The UK’s annual rate of inflation showed a shock rise in February after retailers offset higher import costs caused by the weak pound.

The prospect of an economic recession left UK blue chips nursing hefty losses today as stock markets tumbled across the world.

Royal Bank of Scotland shares plunged nearly 40% to a 15-year low today as speculation mounted over an imminent taxpayer-funded rescue of Britain’s banks.

London’s leading shares plunged to a three-year low today as markets endured a second day of turmoil in the aftermath of the Lehman Brothers collapse.

The FTSE 100 Index was near to a three-year low today after weaker banking shares pushed the top flight down another 1.8%.

Oil prices fell to their lowest level for about four months today amid expectations that slower world growth would reduce demand.

There were fresh signs of financial woe today as figures revealed the UK economy grew more slowly than first thought in the opening three months of the year.

Soaring fuel and food prices pushed inflation above 3% last month to its highest reading since records began more than 11 years ago, official figures showed today.

Rate setters at the Bank of England will meet today to begin their two-day talks on the cost of borrowing in the UK amid expectations for a no-change vote.

The Bank of England is expected to frustrate households this week by leaving interest rates unchanged at 5% for another month.

The UK's treasury made a fresh move to shore up Northern Rock today, as Bank of England Governor Mervyn King warned of more gloom for banks across the world.

Bank of England Governor Mervyn King is set to face a fresh grilling from MPs today over the rescue of crisis-hit Northern Rock.

UK chancellor Alistair Darling said that he was considering guaranteeing people’s savings held in a bank or building society up to £100,000 (€143,404) in the wake of the Northern Rock crisis.

Bank of England Governor Mervyn King faces a grilling from MPs today over his handling of the crisis at mortgage lender Northern Rock and the wider turmoil in financial markets.

The Bank of England kept UK interest rates on hold at 5% today – as further signs of a booming housing market raised the prospect of a hike next year.

Some the world’s major central bankers have warned the US that the international community could be running out of patience with the massive US budget and trade deficits that have pushed the dollar lower and increased the cost of their exports in America.

Conflicting data over the state of the British housing market was released today with figures showing that price growth was slowing but mortgage lending booming.