John
11-10-2010, 05:40 PM
The Bank of England has said "substantial" government austerity measures should not send the UK into a double-dip recession.
But the Bank warned in its quarterly inflation report - the first since the spending review - that the strength of the recovery remains highly uncertain, with households and businesses likely to tighten their belts.
Britons also look set to be hit with a sharper-than-expected rise in the cost of living over the coming months due to a combination of soaring commodity costs, energy bill hikes and the impending rise in VAT as well as the impact of a weak pound.
Governor Mervyn King said the UK's economic recovery is likely to continue, adding that he was not expecting a sudden, sharp slowdown.
UK growth is expected to be "broadly similar" to that forecast in the August report, with the recovery looking to have peaked in the second half of this year and falling back to around an annual rate of 2.5 per cent in 2011 before gradually picking up to just over 3 per cent in late 2012.
The report suggests the Bank was still in wait-and-see mode in terms of whether to bolster money-boosting efforts through more quantitative easing.
Mr King added: "At present, there are large upside and downside risks to inflation. Monetary policy has to balance these risks."
Source - Yahoo News.
But the Bank warned in its quarterly inflation report - the first since the spending review - that the strength of the recovery remains highly uncertain, with households and businesses likely to tighten their belts.
Britons also look set to be hit with a sharper-than-expected rise in the cost of living over the coming months due to a combination of soaring commodity costs, energy bill hikes and the impending rise in VAT as well as the impact of a weak pound.
Governor Mervyn King said the UK's economic recovery is likely to continue, adding that he was not expecting a sudden, sharp slowdown.
UK growth is expected to be "broadly similar" to that forecast in the August report, with the recovery looking to have peaked in the second half of this year and falling back to around an annual rate of 2.5 per cent in 2011 before gradually picking up to just over 3 per cent in late 2012.
The report suggests the Bank was still in wait-and-see mode in terms of whether to bolster money-boosting efforts through more quantitative easing.
Mr King added: "At present, there are large upside and downside risks to inflation. Monetary policy has to balance these risks."
Source - Yahoo News.