Mervyn King issues warning over recovery

The governor of the Bank of England, Mervyn King, has sounded a note of caution on the economic recovery after last week's promising growth figures, and said he is in no hurry to "apply the brakes" by increasing interest rates.

He told the cross-party Treasury select committee on Wedesday that George Osborne's austerity budget had not made a "significant difference" to the chances of the economy suffering a double-dip recession. But he did take issue with the sceptics who claim that Osborne's package of spending cuts and tax rises would undermine the recovery.

King stressed that although the growth figures for the second quarter of the year were positive it would be dangerous to put too much emphasis on them. "We cannot be confident that the recovery in demand, output and employment here in the UK will be sustained," he told MPs.

Read a full report at the Guardian

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