This was a week for good news in the Financial markets; the IMF upgraded its forecasts for world economic growth and there was increasing confidence that European banks would pass their stress tests. Borrowers were pleased, though not surprised that UK interest rates remained unchanged. Overall world stock markets recorded gains across the week. In the UK there were strong car sales while figures for industrial and manufacturing output were perhaps stronger than some anticipated. The area of particular interest is trying to get to grips with UK inflation which continues to float above the Bank of England's target rate. There always seems a valid reason as to why this is; high energy prices, VAT increases and so on but can these continue to be the driving causes. However now we have seen that the coalition government means business when it comes to tackling the deficit, low interest rates will be a necessary tool to combat recessionary pressures, we must hope that inflationary pressures can manage themselves without the help of the interest rate tool. read more ...