The Bank of England has warned that economic growth will remain below pre-financial crisis levels for at least the next three years, and could shrink in the final three months of the year.
The Governor of the Bank of England delivered his gloomy outlook as he presented the Bank's latest quarterly inflation report. Economics Editor Richard Edgar reports:
The economy grew 1% in the third quarter, bringing the longest double-dip recession since the 1950s to a close, but experts warned the underlying picture was bleak.
Sir Mervyn said student tuition fees and rises in energy bills were to blame for rising inflation, and said he expected inflation to fall back towards the Government's 2% target later than expected.
Labour said today's "sobering report highlighted the Government's "failing policies"