King upbeat in final Bank of England forecast

The outgoing Bank of England Governor Sir Mervyn King has given his most upbeat signal yet that the UK will recover from the financial crisis.

During his last forecast as governor, Sir Mervyn predicted growth will be a "little stronger" than previously hoped, setting the UK on course for a "modest and sustained" recovery.

He said the economy should expand by 0.5% in the second quarter of this year, while inflation will not surge as much as feared.

But he warned it will be a "weak and uneven" recovery.

ITV News economics editor Richard Edgar reports:

Read: Richard Edgar's blog "Good news today but a tough task awaits the new Bank of England governor".

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Osborne: 'Our plan is working'

George Osborne will tonight insist that the Government was sticking to its economic plans, telling business leaders "now is not the time to lose our nerve". The Bank of England today predicted a "modest and sustained" recovery.