Bank of England governor Mervyn King has said the UK’s economy has only just started on the road to recovery.
The Bank reported in its latest inflation report that it wouldn’t be until late 2011 before the economy return to pre-recessionary levels.
Interest rates were kept at 0.5% for the eighth month in a row.
King warned that inflation could rise sharply over the next few months.
The Bank of England has extended its programme of injecting money into the UK economy through quantitative easing by £25 billion bringing the total to £200bn.