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The Bank of England Governor, Sir Meryvn King, has warned that inflation will rise to 3% or more and remain above target for another two years.
Mr King also predicted a "slow, but sustained recovery."
A spokesman for the Treasury has given the following statement regarding the Bank of England's quarterly report:
The Bank of England Governor has insisted that the rate of inflation is not out of control, despite the Bank's prediction that it will stay above the 2% target for the next two years.
He told ITV News' Economics Editor Richard Edgar that the higher rate of inflation is "not desirable" but that it would be better to tolerate it in "in the short term" than risk damaging the recovery.
The Prime Minister's official spokesman has said that David Cameron's view on the Bank of England's quarterly report "is that that economy is healing".
Sir Mervyn King said that the recovery of the British economy will depend very much on wider conditions in the world economy.
Announcing the Bank of England's quarterly forecast, he said there is a limit to what domestic measures can achieve.
Bank of England Governor Sir Mervyn King has defended what he described as a "temporary albeit protracted period of above-target inflation".
He said that any attempt to lower inflation to below the 2% target would "risk derailing the recovery".
The Bank of England has released its quarterly inflation report for February 2013:
The Bank of England said today it expects the UK economy will see a "slow, but sustained recovery" but warned that inflation will rise to 3% or more and remain above target for another two years.
The average earnings of UK workers have been falling in real terms for the last three years and are now at 2003 levels, a new article from the Office for National Statistics has shown.
After three decades of strong growth, real wages peaked in 2009 at £12.25. Since then inflation has outstripped wage increases, leading to real wages of £11.92 in 2010 and £11.41 in 2011.
This means that real wages have dropped by almost 3% between 2010 and 2012.
Hikes in energy bills and tuition fees are behind the high rate, as well as air fares and a recovery in alcohol and food prices.
Figures from the British Retail Consortium suggest the high street performed far better than expected, driven by heavily discounted clothes and shoe prices over the Christmas period.
Howard Archer, chief UK and European economist at IHS Global Insight, said that the weak pound was also a factor.