Bank of England governor Sir Mervyn King has said the road to economic recovery in the UK will be long, arduous and uneven.

"After decades in which the stock of debt built up rapidly, there is a reappraisal," he was quoted saying in the speech.

Sir Mervyn said falling inflation and subdued wage growth nevertheless gave the financial institution more scope to act.

"There is scope for interest rates to keep low, and, if needed, for additional asset purchases," he added.

Official figures released the other day demonstrated that the individual Prices Index (CPI) measure of inflation in England fell to 4.2% in December, down from 4.8% in November.

Speaking working in Brighton, Sir Mervyn explained that low development in Great Britain economy has not been only due to inflation but additionally down to households tightening their belts as a result of worries about jobs and future income.

"Households overall have been net savers, as opposed to net borrowers, for every of history 36 months," he stated.....Read More

Vodafone's acquisition of Hutchison Essar is not liable to Indian taxation, a court has ruled, as the 2007 transaction took place outside the sub-continent - despite Essar being based there.

Vodafone and Hutchison successfully argued at the Indian Supreme Court that as neither company is headquartered in India they don't have to stump up for local capital-gains tax, which could have hit £3bn once all the various penalties for late payment were included.

So now the Indian government will have to pay back the bonds and guarantees amounting to several hundred million quid which Vodafone was forced to hand over during the four years the case rumbled on.

The Indian tax office reckoned Vodafone should have handed over £1.4bn in capital gains tax before the deal was allowed to go through in 2007, and won a couple of rounds at court before the matter reached the Supreme Court whose ruling is final...Read more

The European Union’s revenues contributed by AAA-rated member states dropped to 33 percent of 2011

The European Union had its long- and short-term issuer credit ratings of AAA/A-1+ affirmed by Standard & Poor’s Ratings Services, a week after the company cut the AAA ratings of France and Austria.
The outlook is negative because of “ongoing risks” for the Eurozone, S&P said. The long-term rating was removed from CreditWatch negative, where it was placed on Dec. 7.
The European Union’s revenues contributed by AAA-rated member states dropped to 33 percent of 2011 budgeted revenues from 49 percent before the Jan. 13 downgrade. In last week’s review, Germany and Slovakia were only two of the 16 countries that were given a stable outlook.
“Nevertheless, in our opinion, the supranational entity known as the EU benefits from multiple layers of debt-service protection sufficient to offset the current deterioration we see in member states’ creditworthiness,” Frank Gill, an analyst with S&P in London..... Read more