King: No Bank remit change

The Bank of England's remit should not change to include anything other than the 2% target of inflation, the outgoing Governor Sir Mervyn King has told ITV News.

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Sir Mervyn King: No need to change Bank's remit

Sir Mervyn King has said he has seen "signs of a recovery" for the economy. Credit: ITV News

The Bank of England's remit should not change to include anything other than the 2% target of inflation, the outgoing Governor Sir Mervyn King has told ITV News.

In the second of two exclusive interviews with Sir Mervyn, he said: "I'm not sure that there is any call for a major change in the remit."

He added: "What‘s most important is that we commit ourselves again to a very clear target for inflation of 2%."

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King: 'Big trade deficit' pattern to be avoided

The outgoing Governor of the Bank of England, Sir Mervyn King has said "there's no point pretending we can go back to the pattern of demand we saw in 2006-2007".

He told ITV News' Economics Editor, Richard Edgar:

We need a big shift of resources towards exports, towards manufacturing and business investment. The consequence of that is we have to accept that private consumption and public spending will not grow as rapidly.

We will get back to the level of unemployment and the path of output, we won't get back to the pattern in which we had a big trade deficit, consumption was high and exports were relatively weak.

That balance has to be changed. Policies are in place to achieve it. We are on track to achieve it. Recovery is in sight.

King: Two things holding UK back

When asked why a rebalancing of the UK economy is not happening at a faster pace, Governor of the Bank of England, Sir Mervyn King told ITV News:

It's because we're in a process that will take a number of years to move to a position with lower spending on consumption and public spending and higher exports or producing things as a substitute for imports. That will require more business investment.

Two things are holding us back at the present.

One is the extraordinary degree of weakness in the euro area. It's in recession, it's our single biggest trading partner. The economies in or close to the area really affect about half of our economy.

The second factor is "the enormous uncertainty generated by what is happening in the euro area is encouraging firms to hold back on investment", he added.

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King: UK manufactured exports demand 'buoyant'

During a two day visit to Birmingham, Governor of the Bank of England, Sir Mervyn King, spoke to ITV News about lessons he had learnt from talking to company bosses and factory workers.

What I've learnt today is that demand for UK manufactured exports is pretty buoyant, and that the new position we're in, the UK has to rebalance its economy.

We have to rely more on exports that we did, this is going to correct our trade deficit and gradually lead us back to full employment.

BoE Governor: UK recovery 'is in sight'

The Governor of the Bank of England, Sir Mervyn King, has said the UK's recovery "is in sight".

Speaking to ITV News' Economics Editor, Richard Edgar, he said: "'A reasonable judgment based on where we are today is that recovery is in sight".

The Governor of the Bank of England, Sir Mervyn King Credit: ITV News

"If you just take away for the moment what happened in the North Sea Oil production and in construction, the UK economy even last year grew by 1.5 percent.

"There is momentum behind the recovery that's coming and I think that during the course of 2013 we will see the recovery come into sight."

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