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UK growth forecast downgraded

The Bank of England has downgraded its growth forecast for 2013 to around 1% as it warns output will remain below pre-financial crisis levels for the next three years.

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Economy 'barely grows' amid squeeze on incomes

The Bank of England Governor says that despite a resilient labour market, the economy has barely grown over the past two years.

Sir Mervyn King said: "The unexpected weakness reflects the impact of the euro area crisis and its effect on confidence and bank funding costs - and the sharp squeeze on real incomes from higher-than-expected world energy and food prices."

Sir Mervyn King delivering his economic assessment this morning Credit: ITN

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