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A cut in interest rates by the Bank of England (BoE) has been recommended in response to the recent turmoil in the credit markets.
In a study reported by the BBC, the Ernst & Young Item Club claims that such a move would imply that the BoE is responding to the risks posed to UK economic growth and consumer confidence.
With consumer confidence having dropped following the events of the Northern Rock crisis, company credit report problems are also beginning to hurt UK businesses through higher lending costs, the report added.
Club economic adviser Adrian Cooper commented to the news agency that many analysts and business start-ups had expected the monetary policy committee to raise the base rate in order to keep inflation under control.
"This has all changed in light of the current turmoil in the markets," he added, stating that the BoE must respond to the financial challenges that have emerged since the US sub-prime mortgage crisis with "appropriate vigour".
Meanwhile, shadow councillor George Osborne has told the Conservative party conference that he would increase the threshold for inheritance tax from £300,000 to £1 million if the Tories were elected to government, the BBC reports.
His speech reportedly outlined that the estimated £3.1 billion cost of increasing the threshold would be acquired through the introduction of £25,000 per year tax charges for high-earning non-domicile workers.
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