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Bank warns on 'substantial' headwinds hindering UK recovery

The Bank of England has said hurdles continue to stand in the way of Britain's recovery, after governor Mervyn King called on the government to do more to boost growth.

Bank warns on 'substantial' headwinds hindering UK recovery

The Bank of England has warned that 'substantial headwinds' continue to stand in the way of the UK's recovery, after its governor Mervyn King urged the government to do more to stimulate growth.

Following surprisingly resilient employment data – showing unemployment fell to 2.49 million – the Bank released the minutes from its latest monetary policy committee (MPC) meeting and raised concerns about the hurdles blocking Britain's return to economic strength.

The growth in household and real incomes has remained choked and there has been a significant drag from fiscal consolidation, the committee said.

On Tuesday, King (pictured) said the recovery had been 'disappointingly slow' and in the MPC's minutes the Bank went into more detail about the difficulties the UK faced.

'The existence of a significant current account deficit at a time of subdued activity and spare capacity suggested that the sterling real exchange rate might be above the level compatible with the necessary rebalancing of the economy,' they said.

There was also little in the way of news to tempt the MPC to alter its inflation outlook, and felt it was too soon to consider the impact of further stimulus.

The minutes of the MPC's monthly meetings, published about two weeks after the meeting is held, are always closely-scrutinised by economists for signs of the Bank's next steps. 'While we do not expect a new round of QE to be announced, we continue to see a bias to easing further,' commented Nomura's Andy Chaytor.

6 comments so far. Why not have your say?

Alan Tonks

Jan 23, 2013 at 16:14

What has The Bank of England or King or his minions ever done for the economy apart from bleating and printing funny money, a whole lot of nothing.

Yes and I can still see from his picture, he is still seeking divine intervention.

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Jan 23, 2013 at 16:26

When will the clowns at the bank realise that if a decent rate of return was paid to savers and pensioners on their savings, there would be more money circulating through the economy as the interest earned would be spent.

I suppose that is too practical and too much common sense for the shortsighted for those stupid eggheads.

Or, is it perhaps that they are allowing massive returns for the bwankers so that they can continue to earn undeserved salaries and bonuses, even with all their criminal activities, rate fixing, rate swaps and downright theft by computer generated charges on accounts healthily in credit etc, etc ,the rich robbing the poor to enhance their already massive riches.

Is it not time,also for them at the FSA, and for those that left who are and were supposed to protect the public to be outed and fined for the criminal excuse of justice. Not justice, but a conspiracy to deny justice to those who suffered at the hands of the bankers, insurers and crooked brokers, not forgetting the bonuses to FSA staff by the rigged 'findings' for the most part favouring he wrongdoers. Rubbing salt into the wounds inflicted by the wrongdoers. Let us not forget the part played in this tragedy by Bliar, cyclops and the Ballses, et al, may they rot in *****.

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Anthony O' Grady

Jan 23, 2013 at 19:52

Mervyn King, the man who totally failed to see the crisis coming. Some did....step forward

Nouriel Roubini

Peter Schiff

Jim Rogers

Robert Prechter

Jon Moulton.....amounts others

Why have we paid this man so much money? Hapless. And his replacement is part of the Goldman Sachs gang, you know the gang that has every western Govt completely under their thumb.

Sad sad world. Stop printing. Money, raise interest rates, take the pain, and move on.

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Michael Peters Fenwicks

Jan 24, 2013 at 04:09

It is not the bank of England that has a tint ear but rather the government that is short sighted.

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joe stalin

Jan 24, 2013 at 08:37

Mervyn needs to go quickly as he is no nearer to being in touch with reality now then he has ever been. The BOE failed to lead when the hour of need came and they have been negligent and vindictive ever since and have been a major obstruction on the road to receovery. As for the pirates above well they may "have seen things coming" but they have lost anybody mug enough to believe that they had somehow a grasp on reality and answers a shed load of money and it is refreshing not to see them spouting their financial C#ap on the networks any more.

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Alan via mobile

Jan 25, 2013 at 00:50

As far as I am aware, Mervyn King has not yet in his term of office actually made an accurate financial forecast.

If that is the case, then what the hell is he still doing in his job and no doubt drawing a very large salary that may even include bonuses?

They might as well chuck him out now on grounds of utter incompetence and appoint an office junior to the job at much less cost and who would probably have more idea how to do the job.

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