Interest rates in Britain will drop to a new 50-year low in the coming months, economists say, as the Bank of England tries to head off a serious recession. The Bank’s monetary policy committee is expected to start the process by cutting rates this week.

The predictions came as Gordon Brown, meeting European leaders in Paris, called for a new £12-15bn fund to help small businesses through the crisis. The fund, an early drawing-down of the existing European Investment Bank budget, would 'show how we can do more in Britain and across Europe to help small businesses, as well as households, through what is a difficult economic time,' he said.

Lady Vadera, the minister and former Brown adviser, is set to take on a more prominent small-business role under the new business secretary, Peter Mandelson.

Sunday Times, Sunday Telegraph