New inflation figures due out should mark the peak in the spiralling cost of living seen so far this year.

Most experts predict the latest round of price hikes from energy firms will have pushed the Consumer Prices Index (CPI) - the Bank of England's official inflation benchmark - to a new record of 5% in September.

But the dramatic events of the past month in the banking world have seen recession replace inflation as the key risk to the UK economy.

The Bank - which cut interest rates by 0.5% in a co-ordinated worldwide move last week - said that the risks to inflation had shifted "decisively" to the downside.

This means policymakers are now more worried about undershooting their 2% inflation target as prices fall in a recession.

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