Sir Mervyn King's final forecast shows signs of optimism

In his final forecast as Bank of England governor, Sir Mervyn King gave what he said was his most positive assessment of the economy since the beginning of the most recent economic crisis.

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

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".


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.