Bank of England warns inflation 'will rise to 3%'

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."

ITV News' Economics Editor Richard Edgar reports.

Read more on the latest inflation figures

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Household squeeze 'to worsen'

The Bank of England governor made clear today that the squeeze on household budgets will only get worse. Sir Mervyn King said he expected inflation to rise to three percent or more by the Ssummer and stay above target for another two years.