Both the Bank of England and European Central Bank are likely to keep interest rates on hold on Thursday and an uncomfortable mix of rising inflationary pressures and weakening growth in this week's data releases will underline the rapidly deteriorating economic environment facing central banks, companies and consumers.

Just over a month ago, a UK rate cut to 4.75 per cent looked like a real possibility but with inflation running at 3 per cent and likely to rise further, those expectations have been dashed.