Keeping the lid on inflation
INFLATION remained flat in October, leaving the door wide open for further interest rate cuts. Underlying inflation, which strips out interest on mortgages, held fast at 2.3% in October - comfortably below the Bank of England's 2.5% target. The headline all-items rate was 1.6% compared with 1.7% in September.
The Office for National Statistics said while clothing and heating oil was cheaper, rising tariffs for mobile phones provided some upward pressure on inflation. The figures came broadly in line with City expectations and markets remained unmoved.
Meanwhile, CBI figures showed manufacturing employers in the South-East predicting 8,000 lay-offs - more than any other region - in the fourth quarter of the year. Across the country as a whole, 30,000 workers face the axe, the regional trends survey of managers indicated. Manufacturers' confidence fell sharply in all parts of the country as they suffered a further slide in export orders following 11 September.
The dollar staged a dramatic fightback in relief that Monday's New York plane crash seemed to be an accident and as Kabul fell to the Northern Alliance. It soared more than half a cent against the euro to 88.24 US cents, a two-month high. That propelled sterling to 10-week highs against the euro, up a third of a penny to 61.17p.
