"Today's projections are for growth to be a little stronger and inflation a little weaker than we expected three months ago"
-Sir Mervyn King, Governor of the Bank of England
The Bank of England has upgraded its growth forecast on Thursday, as the economy is showing signs of recovery. Moreover, the BoE has lowered its inflation outlook for the first time since the recession struck five years ago. British economy is now expected to expand 1% this year, compared with a 0.9% estimate made in February, while inflation will peak at 3.1% in June, a little lower than its previous outlook. As to the shorter term, Sir Mervyn King projects now a 0.5% growth in the second quarter, following the 0.3% expansion in the first three months. At the same time, The Chancellor welcomed the positive sentiment and dropped a hint that from his opinion the economy has turned the corner.
"Today's projections are for growth to be a little stronger and inflation a little weaker than we expected three months ago. That is the first time I have been able to say that since before the financial crisis," Sir Mervyn King, Governor of the Bank of England said. "A recovery is in sight."
"Almost everyone believes that countries need medium term plans for fiscal consolidation and for the automatic stabilisers to be allowed to work. That's what we've got and why the deficit hasn't come down anywhere near as much had been hoped. That seems to me highly appropriate," he said.
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