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The UK economy has “only just started” along its road to economic recovery, according to Bank of England governor Mervyn King.

In its latest inflation report, the Bank indicated it would be late 2011 before the UK economy recovered to the level it was at before the recession.

Mr King also warned inflation may “rise sharply over the next few months”.

He also said the Bank was “open minded” about extending its programme of pumping money into the economy.

Last week, the Bank extended the programme – a policy of injecting money into the economy through buying bonds from banks and other companies called quantitative easing – by £25bn.

http://news.bbc.co.uk/1/hi/business/8353931.stm

The Bank of England’s rate-setters have decided to pump another £50bn of new money into the economy in their programme of quantitative easing.

It will take their total spending to £175bn, unexpectedly going over the £150bn set aside by the chancellor.

In a statement, they said that the UK recession “appears to have been deeper than previously thought”.

The rate-setters also decided to keep interest rates unchanged at their historic low of 0.5% for a fifth month.

http://news.bbc.co.uk/1/hi/business/8187360.stm