After Britain's economy shrank unexpectedly in the third quarter, and with two thirds of the City expecting an expansion to the QE programme, simply shutting off the tap of government bond purchases would risk being more of a shock than the economy could bear.

On the other hand, the Bank clearly believes that the worst is over for the economy and that recovery will come soon -- even if it's going to be weak.

Thursday's decision means the central bank will keep buying government debt until February, but at only half the pace of before. This still amounts to around 2 billion pounds a week, not including the much smaller sums of corporate debt that the Bank is buying.

What the decision means for a typical household is harder to calculate. The Bank says that its quantitative easing programme has raised the price of government and corporate
bonds, making borrowing cheaper.

But for average firms and consumers looking for a loan, the benefit is harder to spot.

There is little clear evidence that banks are much more willing to lend than a few months ago -- though the Bank would argue that quantitative easing has been instrumental in avoiding the recession turning into a depression.

In the longer term, the big unknown is the impact that quantitative easing will have on inflation. Sterling's weakness against the dollar and the euro will push inflation up in the short term, and going forward the Bank of England said it faced a balancing act.

While rising unemployment and half-full shops and factories will keep a lid on prices, policymakers know that quantitative easing could exert upward pressure on demand and prices for months if not years after it has stopped.

That's why they took the decision today which could mark the gradual phasing out of this unprecedented policy of asset purchases.

Billed as "Darling's economic repair kit -- fixes deflation in all business cycles", the marketing gimmick highlights the serious challenge facing Darling as he prepares to deliver his annual budget to parliament on April 22.

Researchers at the non-partisan Institute for Fiscal Studies  say Britain needs to find another 40 billion pounds in savings or higher taxes, equivalent to nearly 3 percent of GDP or £1,200 per family, if it is to balance its budget by the 2015/16 tax year, as Darling promised to do in his October pre-budget report.

IFS Deputy Director Carl Emmerson, who co-wrote the report, told Reuters MacroScope that Darling would have a tough time politically making convincing promises about future tax rises or cuts to government spending, especially as there's a national election due within little over a year.

But doing so could make it easier for Britain to raise the necessary billions from international debt markets, after a scare last month when the Debt Management Office failed to sell all of a 2049 gilt to investors.

It would also allow more scope to announce a slightly bigger fiscal stimulus package at the budget, said Emmerson -- who rejects the idea that the government should start reining back spending or raising taxes in the recession.

(Reuters photo: Pascal Rossignol)

The one that comes closer is iRiver's SPINN media player, which is a similar size to Apple's iPod Touch but 40% lighter and has a touchscreen with superior OLED technology, which makes it ideal for watching video. The SPINN's angular metal case contrasts with the more rounded Touch and is named after an knob built into its top right corner that allows users to easily flick through photos and music.

Buyers in the market for a dedicated music and video player may overlook the SPINN's lack of wifi to connect to the internet, which the Touch has, but the SPINN's Achilles' heel is its meagre 8 gigabytes of memory. This is enough for thousands of songs but only three or four films. The top-of-the-range Touch has four times the capacity.

The other product viewed as a challenger to Apple was Samsung's ultraportable X360 laptop which faces up to the Macbook Air as well as Lenovo's X300. Like the Air but unlike the fractionally heavier X300, Samsung's X360 eschews a DVD drive and weighs just 1.27 kg - even less than the Air.

The X360 can store more files than the Air, which came out in February, and connects more easily to a wider range of devices. Unfortunately in a market segment where looks matter, the X360's shiny black plastic comes across as brash and, well, plasticky compared to the Air's stylish tapered aluminium and the Lenovo X300's discreet matt black casing.

Samsung's display model was also covered in a generous layer of finger grease by lunchtime on Friday - testament for sure to visitors' eagerness to paw the laptop but a warning to prospective buyers that they'll need to back some wet-wipes when they travel.

Not being an expert on hifi history, it was only when I came to Germany's Grundig a bit later that I realised the idea - if not the implementation - wasn't new.

Squashed 1970s-style spheres with chrome waistbands in both black and white stood on stands or hung from the ceiling. Visitors could sit on a roundabout to appreciate the Audiorama 9000's unchanging sound as they went round in a circle. The design is a modern revamp of Grundig's Kugelstrahler 700 speaker, which as early as 1969 offered an all round sound.

To add a further 1970s touch, head over to Germany high-end TV manufacturer Loewe. While other companies are striving to make their models as thin as possible, Loewe is offering customised side panels to some of its less anorexic ones. Best of the bunch was a very strokeable, acid-tipped mohair option. A Loewe spokesman wasn't sure whether the concept would reach the shops, so if you might spend over 2,000 euros on a TV with its own fur, let Loewe know.

First the sublime: Sony's XEL-1 TV, based on OLED technology, will go on sale in Europe for the Christmas season for around 3,000 euros after being available in Japan for almost a year. With just an 11 inch diagonal, you don't get much screen size for your money, but you do get a TV that's just three millimetres thick and has strikingly more vivid picture than conventional LCD technology.

Of course, Sony isn't going to be alone with OLED televisions for long. Samsung also has an impressive array to go on sale next year, though theirs will be pricy too -- product executive Noh Young Joong told Reuters they would likely cost two to three times as much as equivalent-sized LCD units.

Turn round the corner at Sony's stand, though, and things rapidly go downhill. Remember those artificial flowers from the 1980s, which gyrated around when you played music? Possibly not, but their spirit lives on and seems to  have possessed ‘Rolly'. Rolly is egg-shaped, about the size of a hand grenade and plays tinny music. It rolls around (dances even) and flips lids covering its speakers. You can stream music from your mobile phone via a Bluetooth wireless network, or store several hundred songs on board. If you have time on your hands, you can even program its dance moves using a laptop.

You may be wondering what the point of it is, though seemingly not the design experts who gave it a prestigious Red Dot award. Rolly goes on sale for 350 euros in October:  roughly the cost of one of Sony's Playstation 3 video games consoles.

A more deserving winner of a design award -- and one that stays the right side of gimmicky -- is an MP3 player from Korea's iRiver that offers a minimalist, and miniature, take on Mickey Mouse. Mickey's features are reduced to two small pastel-coloured spheres for ears and a larger one for the face. The ears act as a volume control and a track skip control respectively; the face has a socket for headphones and a discreet Disney logo. The price is right too, at around 40 euros when it goes on sale in Europe later this year.

    The rise of casual video gaming may have grabbed the headlines over the past couple of years, but the more hardcore end of the market dominated at Europe's biggest gaming convention in Leipzig last week.
    Apart from new iterations of popular karaoke-style games such as Activision's Guitar Hero, Electronic Arts' RockBand and Sony's SingStar, which arguably kick-started the trend of easy-to-play casual fare, the world's biggest games publishers focused on products for their core audience.
    Upcoming release Command and Conquer Red Alert 3 was a case in point. Not only does the game involve sending dozens of types of futuristic military unit across apocalyptic landscapes, but EA was marketing it in part on the basis that one of the
actresses in it, Jenny McCarthy, is a former Playboy playmate of the year.
    Most publishers were playing it safe, focusing on sequels such as a new version of The Sims -- the virtual doll's house franchise which has sold over 100 million copies since launch in 200? -- or movie tie-ins such as a game based on new James Bond film Quantum of Solace.
    True innovation was thin on the ground, at least on a whistle-stop tour view of the main publishers' offerings. Ubisoft demoed a game in the same genre as Command and Conquer which could be fully voice-controlled -- apparently a first for consoles -- while Sony previewed LittleBigPlanet. This marries the hot theme of user-designed content (think YouTube or MySpace) to an age-old platforming mechanic, the basics of which that would be familiar to anyone who had played Nintendo's Mario games.
    Cute sack-doll characters jump over flames and on to rising platforms, but the novelty is that most of the game, from the characters' outfits and personalities to the landscapes over which they clamber can be modified by players and shared online.
    But for two of the other most hotly awaited games of the season, there was no news, albeit for opposite reasons. EA's Spore, in which players guide a lifeform in the Darwinian struggle from primaeval soup to interplanetary conflict, is due out on Sept. 4 and had already been presented in near-final form at other events, so did not get a spot in EA's main presentation.
    World of Warcraft: Wrath of the Lich King, the next installment of the online role-playing game that has over 10 million subscribers -- was available to play in an early form, but it remained unclear when the final version would be on sale. A spokesman for Activision unit Blizzard could not even confirm it would definitely be out before Christmas.

    * Where do you think gaming is going in the run-up to this year's holiday season? Were you at the Leipzig Games Convention? Tell us what you think below.