BoE King Leaves Optimistic Parting Gift for UK Economy

Bank of England Governor Mervyn King offered some rare good news for Britain’s economy on Wednesday when he presented his final set of economic forecasts before stepping down after more than 20 years at the bank.

For the first time in years, the central bank predicted that growth would be faster and inflation lower than it expected three months earlier, though King still warned the recovery could not be taken for granted.

“Today’s projections are for growth to be a little stronger and inflation a little weaker than we expected three months ago. That’s the first time I’ve been able to say that since before the financial crisis,” King told reporters.

“But this is no time to be complacent. We must press on to ensure a recovery and to bring down unemployment.”

Sterling rose against the dollar after the forecasts. British government bond prices extended their losses.

King has presented the BoE’s Quarterly Inflation Report every three months since the start of 1993, first as the BoE’s chief economist and since 2003 as governor.

In just over six weeks he will hand the reins to Mark Carney, who Chancellor George Osborne is poaching from Canada’s central bank in the hope that he will bring new thinking on how to invigorate Britain’s anaemic recovery.

via Reuters

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