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Rocky road ahead for UK recovery
Thursday August 12th 2010
People across the UK should perhaps think about income protection insurance after it was warned slower growth and higher-than-expected inflation will see the economic recovery slow down.
Mervyn King, the governor of the Bank of England, said Britain faced a "choppy recovery".
In the latest forecasts announced, the Bank showed slower growth the previously thought for the rest of the year.
This is due to the effects of George Osborne's emergency Budget kicking in.
Inflation is also set to remain above 2% until the end of 2011, as a result of next year's VAT hike.
The latest gloom from the Bank comes after recent surveys showed a sharp slowdown in high street sales, falling house prices and consumer confidence at its lowest for more than a year.
The governor said the impact of the financial crisis would fade only gradually, with the problems in the banking sector "likely to mean a choppy recovery".
The Bank added that household disposal incomes would be squeezed as a result of the deficit-tackling measures, with some companies likely to face lower public sector demand.
Households have also become more pessimistic in recent months amid persistent fears over unemployment and subdued wage growth, the report added.
Copyright © Press Association 2010
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