Chancellor backs Sir Mervyn's report on the economy

Help

The Bank of England has reduced its growth forecast - warning that the economy will grind to a halt this year.

In his quarterly inflation report, the bank's governor, Sir Mervyn King, said there would be virtually zero growth in 2012 as a whole.

However, he revealed that inflation was now expected to hit the Government's 2% target towards the end of this year.

The Chancellor of the Exchequer, George Osborne, broadly agreed with Sir Mervyn that the economy was healing but that it was a "slow and difficult process".

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.