Interest rates will continue to move higher next month rather than fall or stay the same, according to a Bank of England economist.
Catherine Mann, a member of the Bank's Monetary Policy Committee, said uncertainty around when the turning point for inflation would come "should not motivate a wait-and-see approach" over setting interest rates.
Inflation has fallen for two consecutive months to 10.5pc but remains close to its 41-year high of 11.1pc set in October and more than five times the Bank of England's 2pc target.
Ms Mann, one of the most hawkish members of the committee, warned business leaders in a speech today that "the consequences of under tightening far outweigh, in my opinion, the alternative".
She said: "We need to stay the course, and in my view the next step in Bank Rate is still more likely to be another hike than a cut or hold."
Last week, the Bank of England raised interest rates by half a percentage point to 4pc - the highest since 2008.
Read the latest updates below.
Construction sector activity lowest since Covid outbreak
The construction sector suffered its lowest level of activity since the early months of the pandemic, according to new figures.
The S&P Global purchasing managers' index (PMI), considered a key measure of the strength of the industry, fell for a fourth straight month to 48.4.
A reading below 50 indicates the sector is shrinking. It is the second consecutive month of contraction after the PMI was measured at 48.8 in December.
Housing activity plummeted to 44.8, after a reading of 48 in December.
Lack of charging points 'biggest hurdle' to electric vehicle ownership
The increase in new car registrations will stall unless Britain invests in its network of charging points, according to business leaders.
Electric vehicle sales helped new car registrations rise year on year for a sixth consecutive month in January.
Nick Williams, transport managing director at Lloyds Banking Group said:
Electric vehicles drive increase in new car registrations
The UK's new car market grew 14.7pc in January, according to the Society of Motor Manufacturers and Traders.
Some 131,994 new cars were registered last month, compared with 115,087 in January 2022.
The number of new cars registered has grown year on year for six consecutive months.
Electrified vehicles are driving the increase.
Registrations of hybrid electric vehicles were 40.6pc higher in January than during the same month in 2022.
National Grid warms up coal power stations as wind power drops
Two coal-fired power plants have been warmed up in case of a shortage of electricity supply as a drop in wind energy tightens supply.
EDF's West Burton A plant in Nottinghamshire has joined Uniper's Ratcliffe-on-Soar plant in the same county in preparation. They are two of Britain's five winter contingency coal power stations.
National Grid's Electricity System Operator (ESO) said it was warming up the plants as a "prudent" organisation and insisted it does not mean electricity supplies are at risk.
The units would be used on Tuesday if they are deemed to be needed.
The amount of Britain's electricity supply provided by wind energy has fallen below 20pc today.
Interest rates 'need to stay the course,' says Bank chief
Interest rates will more likely rise again rather than cut or be held when the Bank of England makes its next decision, a member of the Bank's Monetary Policy Committee has said.
Catherine Mann, one of the most hawkish members of the committee, said uncertainty around when the turning point for inflation would come "should not motivate a wait-and-see approach" over setting interest rates.
In a speech this morning, she warned "the consequences of under tightening far outweigh, in my opinion, the alternative".
She told business leaders: "We need to stay the course, and in my view the next step in Bank Rate is still more likely to be another hike than a cut or hold."
Markets fall ahead of UK economic data
The FTSE 100 has slipped from its record high as global sentiment soured after data pointing to strength in the US labour market raised worries that the Federal Reserve could keep raising interest rates for longer.
The blue-chip index has fallen 0.5pc to 7,860.35 after setting a record high of 7,906.58 in the previous session, helped by a weaker pound and a jump in commodity-linked stocks.
Fewer than 10 companies on the FTSE 100 are in positive territory more than half an hour into trading.
Globally, stocks wilted and government bond yields rose after upbeat economic data from the United States and other economies lessened the risk of recession, but also suggested rates would have to rise further and stay up for longer.
Meanwhile, worries about the UK economic outlook kept the domestically focussed FTSE 250 index under pressure. The index was down 0.6pc to 20,461.86.
Data due later this week is expected to show the UK economy contracted by 0.3pc in December on a month-over-month basis, just enough to leave the gross domestic product flat in the fourth quarter.
Among individual stocks, Hargreaves Lansdown fell as much as 3.5pc after Credit Suisse downgraded the wealth manager's shares to "underperform" from "neutral".
Apprenticeship system 'broken' say employers
Four leading trade bodies have called the apprenticeship system "broken" and have written to the Government asking for reform.
The apprenticeship levy taxes employers 0.5pc of their payroll each month if they have a wage bill of more than £3m a year.
Businesses paying into the pot can use this money to fund apprenticeship training schemes.
The British Retail Consortium (BRC), UKHospitality, techUK and the Recruitment & Employment Confederation said the system is restrictive as businesses cannot use the money to fund courses shorter than a year and £3.5bn is being wasted as a result.
They said the Government should change the levy to a broader skills levy and allow businesses to fund courses that are shorter, more targeted and more tailored.
Helen Dickinson, chief executive of the BRC, said:
FTSE 100 falls back after record close
The FTSE 100 has fallen back after its record-breaking run on Friday that saw the market close at an all-time high.
The blue-chip index has dropped 0.6pc to 7,858.20 while the midcap FTSE 250 is down 0.7pc to 20,478.85.
The FTSE 100 closed at a record 7,901.80 on Friday, having also reached an all-time intraday high of 7,906.58.
German factory orders rise but still 'weak start to 2023'
German factory orders grew more than anticipated in December but the data still points to "a weak start" to the year for the Germany economy, according to analysts.
Demand increased 3.2pc from the previous month, more than the 2pc rise analysts had predicted. The jump was due to large orders, without which there would have been a 0.6pc decline, the statistics office said.
German output shrank 0.2pc in the final quarter of last year, making a recession on the back of higher energy bills difficult to avoid.
Quickly rising borrowing costs that have yet to fully filter through are adding to economic headwinds.
Several indicators are still pointing to growing confidence after mild winter weather and well-filled gas storage facilities all but eliminated the risk of shortages.
However, at least one economist believes this " wasn't a good factory order report":
Renault and Nissan boards approve alliance reset
The boards of French automaker Renault and Japanese partner Nissan have approved a major overhaul of their rocky alliance following months of negotiations, the companies said this morning.
The carmakers said in a statement that they "rebalanced" their relationship, with Renault reducing its stake from 43.4pc to 15pc, the same size as Nissan's share of its French counterpart.
Dell to cut 6,650 jobs
Dell has become the latest technology company to announce huge cutbacks, revealing it will axe 6,650 jobs.
The business is experiencing market conditions that "continue to erode with an uncertain future", co-chief operating officer Jeff Clarke wrote in a memo seen by Bloomberg.
The job losses amount to about 5pc of Dell's global workforce.
Dell and other hardware makers have seen demand fall away following a boom during the pandemic.
Industry analyst IDC said personal computer shipments dropped sharply in the last three months of 2022.
It said Dell suffered the largest decline, falling 37pc. The company generates 55pc of its revenue from PCs.
Australian rival to buy Britishvolt in boost for UK electric battery factory ambitions
Plans for an electric battery gigafactory in the UK have been revived after an Australian business championed by Lord Botham snapped up the assets of collapsed Britishvolt.
Recharge Industries fended off interest from a number of companies to be chosen as the preferred bidder for the company.
Britishvolt plunged into administration in January having failed to secure a rescue deal for its plans to build a £3.8bn gigafactory near Blyth. It had £100m in government funding earmarked for the plant.
David Collard, founder of Recharge Industries and chief executive of its parent Scale Foundation, said the Australian company was "thrilled" and "can't wait to get started making a reality of our plans to build the UK's first gigafactory".
He added: "After a competitive and rigorous process, we're confident our proposal will deliver a strong outcome for all involved."
Mr Collard had previously thanked Lord Botham for the "proactive assistance" of cricket legend Lord Botham, who is the UK-Australian trade envoy, ahead of its bid.
More than 200 staff were made redundant as part of the collapse of Britishvolt in January.
Britishvolt's joint administrators EY said the deal was for the majority of the business and assets of the company, which made 200 people redundant when it fell into administration last month.
The agreement is actually with Scale Facilitation Partners, an international trade consultancy based in Geelong and Manhattan.
It indirectly owns battery maker Recharge Industries.
EY said the deal came after administrators considered "multiple approaches", with "numerous offers received" for the failed electric battery maker.
It added: "Completion of the acquisition is expected to occur within the next seven days."
The collapsed electric battery maker Britishvolt has been bought out of administration by an Australian company championed by Lord Botham.
Recharge Industries will now work towards building the UK's first gigafactory.
Lord Botham, the England cricketing legend and a UK-Australia trade envoy, had assisted the company in making its bid.
5 things to start your day
1) Amazon to sublet UK warehouses as growth plans go awry - Review of operations comes as tech giant suffers worst annual loss since going public
2) Mortgage demand to hit 12-year low as high interest rates hammer borrowers - Stretched affordability could cause an increasing number of borrowers to default
3) Working from home is fuelling fraud epidemic, warn managers - Remote practices risk exposing staff to 'social engineering' tactics used by scammers
4) Hunt's misguided policies will harm economy, warns ex-Tory business minister - Decision to slash tax credits for research is based on faulty data, says Greg Clark
5) Crispin Odey: 'It will take a Labour government for the Tories to realise Liz Truss was right all along' - Comments come as Truss breaks silence to defend her economic agenda
What happened overnight
Stocks in Asia retreated as an unexpectedly strong US jobs report raised the prospect of more rate hikes from the Federal Reserve, while concern over US-China geopolitical tensions also weighed on sentiment.
The dollar climbed for a third day after a gauge of its strength rose more than 1pc Friday, when figures showed a surge in payrolls and unemployment at a 53-year low.
This points to persistent US inflation and bolsters the case for more rate increases. South Korean stocks and contracts for US equities also declined.
Shares fell in Hong Kong and mainland China, with the Hang Seng Index on course for the lowest close in a month.
US-listed Chinese stocks slipped Friday after the Biden administration decided to postpone Secretary of State Antony Blinken's upcoming trip to China in light of an alleged Chinese spy balloon, that was later shot down.
Tokyo stocks ended higher after a report about the Bank of Japan's next governor fuelled speculation that the institution would stick to its ultra-loose monetary policies.
The benchmark Nikkei 225 index climbed 0.7pc to end at 27,693.65, while the broader Topix index added 0.5pc to 1,979.22.