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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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Treasury: Economy healing but road ahead is 'difficult'

A spokesman for the Treasury has given the following statement regarding the Bank of England's quarterly report:

As the Chancellor and the Governor have both said, the economy is healing but the road ahead remains difficult.

The Bank of England forecast a sustained recovery in the coming period, and alongside the IMF, predict growth in 2013.

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