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| Bank of England's Sir Mervyn King says recovery in sight | Bank of England's Sir Mervyn King says recovery in sight |
| (35 minutes later) | |
| The UK economy has "cause for optimism", the governor of the Bank of England has said. | The UK economy has "cause for optimism", the governor of the Bank of England has said. |
| Sir Mervyn King, presenting the Bank's latest href="http://www.bankofengland.co.uk/publications/Documents/inflationreport/2013/ir13feb.pdf" >quarterly inflation report, 20 years after it issued its first one, said "a recovery is in sight". | |
| But he said the outlook for inflation had worsened since November. | But he said the outlook for inflation had worsened since November. |
| He now expects the inflation rate, currently 2.7%, to rise to at least 3% by the summer and to remain above the Bank's 2% target for two years. | He now expects the inflation rate, currently 2.7%, to rise to at least 3% by the summer and to remain above the Bank's 2% target for two years. |
| The Bank's last report in November said that inflation would fall back towards its 2% target in the second half of this year. | The Bank's last report in November said that inflation would fall back towards its 2% target in the second half of this year. |
| Sir Mervyn said that factors outside of the Bank's control - increases in university tuition fees and utility bills - had added to inflation recently. | |
| "If you like, it is a bit of a self-inflicted goal in terms of the damage done to real take-home pay, perhaps another way of trying to implement fiscal consolidation through moving up the price level," he said. | |
| "This is not the result of easy monetary policy and nor does it reflect what's going on in the economy." | |
| He drew parallels between now and when the Bank's first inflation report was presented in 1993. | |
| "[In February 1993] unemployment had just reached its peak. Although we didn't know it at the time a recovery was on its way. | |
| "[Today] there is cause for optimism. Today too a recovery is in sight." |