Bank of England chief urges caution amid strong growth

28th July 2010, Comments 0 comments

Bank of England Governor Mervyn King on Wednesday warned that sustained economic recovery for Britain was uncertain despite a recent jump in output.

"The wider economic problems around the world underline the fact that we cannot be confident that the recovery in demand, output and employment here in the UK will be sustained," King told a panel of lawmakers.

Britain's economy sprang a big surprise with growth of 1.1 percent in the second quarter, the strongest pace since 2006, official data showed last week.

The figure was almost double forecasts for 0.6-percent growth in the April-June period, and builds on the economy's modest emergence from a record-length recession late last year.

King said that while the second quarter growth data was "encouraging", a gradual improvement in credit conditions "seems to have come to a halt".

The Bank of England's key interest rate has stood at a record-low level of 0.50 percent since March 2009 in an attempt to breathe life into the economy.

© 2010 AFP

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