£50bn cash boost as rates are held

The Bank of England held interest rates unchanged at their record low of 0.5 per cent today but stepped up its programme to boost the economy with injections of new money.

Cameron predicts £1,500 'tax bombshell'

Gordon Brown raised the spectre of deflation yesterday as David Cameron predicted that soaring government borrowing would result in a £1,500 "tax bombshell" for average earners. In fiery Commons exchanges with the Conservative leader, Mr Brown acknowledged for the first time that the world could face the first period of falling prices since the Great Depression of the 1930s. That would risk a recessionary spiral in which people did not spend because they thought prices would fall further, and interest rates could not be cut to stimulate demand once they fell to zero.