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UK growth 'to remain sluggish'

The Bank of England has warned today that the UK's economic recovery will not be as quick as originally hoped.

The Bank had projected a 2011 growth rate of 1.8 per cent in May, but it has now dropped this prediction to just 1.4 per cent.

US fiscal policy and the problems hitting the eurozone were both cited as reasons for the reduced outlook by Bank of England governor Mervyn King.

The Bank warned there was also a chance that inflation could reach five per cent in the months to come, with this likely to be forced up by expensive utility bills.

Although the country's growth is expected to remain sluggish for the time being, the Bank added that it expects it to be above normal levels by the year 2014.

Copyright © Press Association 2011

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