UK Chancellor George Osborne said next month’s Budget will continue to confront Britain’s problems as he cautioned the recovery was “not yet secure” despite a recent surge in growth.
The Bank of England's new Governor Mark Carney said the central bank will not consider raising its record low interest rate and stimuli until unemployment falls below 7%.
Bank of England's Monetary Policy Committee (MPC) has left interest rates at 0.5%. The key borrowing rate has been at that level since March 2009. MPC also said it would make no change to the £375bn of monetary stimulus it is providing through its quantitative easing program (QE).
Disappointing figures on industrial production and construction in November have added to fears that the UK economy contracted in the last quarter of 2012. The index of production grew 0.3% in November, compared with October, but had been expected to grow more as some North Sea oil and gas production resumed following maintenance.
The Bank of England has announced on Thursday it will pump a further £50bn into the UK economy over the next four months through its quantitative easing (QE) program to try to help the economy.
Bank of England policymakers on Thursday decided against pumping more cash into Britain's recession-hit economy, preferring to sit tight after a surprise spike in inflation.
Bank of England's Monetary Policy Committee (MPC) has kept UK interest rates on hold at 0.5%, and unveiled no new quantitative easing (QE) measures.
The global economic recovery is slowing faster than forecast, but a return to recession is unlikely, a leading global economic group has said. The Organisation for Economic Co-operation and Development (OECD) said the slowdown had been more pronounced than anticipated.
The UK economy faces a choppy recovery over the next two years, the governor of the Bank of England, Mervyn King, has warned. His comments came as the Bank lowered its economic growth forecast and said inflation would stay higher for longer than previously forecast.
The European debt crisis is a key risk to the UK's banking sector and banks should build up their cash reserves in response, the Bank of England has warned. In its latest financial stability report, the central bank welcomed recent measures taken by the EU to stem the crisis.