The Bank of England must contend with a slowdown in Britain's economy but also stubborn inflation pressures when it considers whether to cut interest rates in early February as well as its message about the outlook for the rest of the year.

As the Bank of England scrambles to unwind the disastrous effects of quantitative easing, the hidden costs of this policy are becoming clear, says Damian Pudner Quantitative easing (QE) has long been the Bank of England’s monetary policy nuclear option.

The Bank of England's Monetary Policy Committee (MPC) uses interest rates to put a brake on the nation's spending.

The Bank of England will cut interest rates four times this year to support a flat-lining economy, economists polled by Reuters said, but they added that risks to inflation are to the upside, suggesting policymakers may end up doing less.

However, it means the Consumer Prices Index (CPI) - the main measure of inflation - remains stubbornly above the Bank of England’s target of 2%. The Office for National Statistics (ONS ...

Alan Taylor, the most recently appointed member of the Bank's monetary policy committee (MPC) said the UK is 'in the last half mile on inflation' and called for a pre-emptive cut

The fall in the headline rate of inflation from 2.6 percent to 2.5 percent was unexpected and positive news for the Chancellor Rachel Reeves.

The Bank of England looks set to resume cutting interest rates next month after official data revealed weaker inflation and anaemic economic growth.

Core inflation, which strips out the direct impact of volatile energy and food prices is now at a four-year low, having dropped to 3.2% in December from 3.5%. Services inflation is at a two-year low of 4.4% after a chunky fall from 5%. This is the real positive news.

Analysis: Milder inflation has brought hope that the Bank of England may lower interest rates, saving borrowers vast sums on loans and mortgages

The Bank of England must contend with a slowdown in Britain's economy but also stubborn inflation pressures when it considers whether to cut interest rates in early February as well as its message about the outlook for the rest of the year.

Despite a generally strong job report, the pound has held close to recent lows.