Bank unsure over recovery

The recovery in the UK economy is likely to be slow and its strength highly uncertain, according to the Bank of England's latest quarterly inflation report. While the bank's policy of quantitative easing had injected money into the economy and improved companies' access to capital markets, the report said spending growth remained weak. Meanwhile, while currently standing at 1.1%, inflation is predicted to rise sharply above its 2% target measure in the near term, as a consequence of higher petrol prices and last year's temporary reduction in VAT coming to an end. Over the medium term, however, the expectation is that inflation will fall back to a level broadly consistent with its target.
 
 
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