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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.

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King: Recovery depends of growth in world economy

Bank of England Governor Sir Mervyn King

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.

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