Member Article

Bank of England says economic outlook uncertain

THE Bank of England has warned that the outlook for the UK economy remains uncertain.

Governor Mervyn King said the recovery was likely to continue, but its strength depended heavily on developments in the world economy.

The Bank’s quarterly inflation report said rising raw material prices, energy bills and next year’s VAT rise meant inflation would remain high next year.

But it is expected to fall below the Bank’s 2% target in two years’ time.Adding to the uncertainty are government cuts which could trigger a slowdown in construction, Mr King said, which has been a key driver in recent faster-than-expected economic growth.

The most recent gross domestic product (GDP) figures showed growth of 0.8% in the third quarter of this year. In the three months before that, the economy grew by 1.2%.Speaking to reporters,

Mr King said a sharp slowdown, however, was unlikely.

This was posted in Bdaily's Members' News section by Ruth Mitchell .