The Bank of England
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Bank of England forecasts 'choppy' economic recovery

The governor of the bank of England is warning that the UK economy is facing a 'choppy recovery' with slower than expected growth and higher than expected inflation.

Mervyn King says the rise in VAT to 20%, which is due in January, means that inflation will stay above the Bank's 2% target until the end of next year.

John Moylan reports.