Economic recovery ‘hard to judge’

Bank of England governor Sir Mervyn King has expressed uncertainty about the prospects for the UK economy.

Addressing the South Wales Chamber of Commerce in Cardiff, the governor acknowledged: "Judging the present state of the UK economy is far from easy."

He added that the overall trend over the past two years has been "broadly flat", although there has been a "zig-zag pattern" when different quarters are compared, with some showing growth and others contraction.

There has been some good news recently, including higher retail sales and falls in unemployment and inflation, although Sir Mervyn said nobody can be sure why joblessness has been falling in a recession.

The governor went on to state: "One thing we can see clearly is that the recovery and rebalancing of the UK economy are proceeding at a slow and uncertain pace. At this stage, it is difficult to know whether some of the recent more positive signs will persist."

Such words may temper optimism amid the recent good data and expectations among many – including Sir Mervyn – that the output figures published tomorrow (October 25th) will reveal the economy to be out of recession.

This may mean those who are struggling to pay off their debt cannot rely on an economic recovery to provide solutions – like better paid jobs – anytime soon.

One way people may be able to make sure they ease the strain on their budgets is to seek help through measures like a debt management plan. 

The governor of the Bank of England is not the only one predicting that the economic road ahead is going to be far from smooth.

In a speech in the City of London today, deputy prime minister Nick Clegg said that despite the expected emergence from recession, Britain's economy is set for "slow and fitful" progress in the next few months.

By Joe White