Bank of England governor, Sir Mervyn King, has warned that the UK economy “may be in for a period of persistently low growth”.
“We face the rather unappealing combination of a subdued recovery, with inflation remaining above target for a while,” continued Sir Mervyn, adding that recently lost growth could be made up only “if you take a very long-term perspective of decades”.
His prediction also included a warning that there is a high probability that the UK’s economy would contract again in the fourth quarter as the Olympics’ temporary boost disappeared.
The Bank of England’s latest Inflation Report predicts growth will remain below its historic trend rate during the next three years. It now does not see the UK regaining its pre-2008 level of output until 2015.