The Bank of England predicts rise in living costs

The Bank of England has predicted that Britain will avoid a double-dip recession, but says there will be a bigger rise in the cost of living than previously expected.

The bank's governor, Mervyn King, said inflation would remain above target until at least the end of 2011. His Quarterly Inflation Bulletin gave no clear indication over the direction of interest rates, nor whether there would be more asset buying, in the form of Quantitative Easing (QE).

He also said in the medium term, the outlook was uncertain.

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