Bank of England governor Mervyn King says the UK economy is showing signs of a recovery but progress will be slow as the impact of the eurozone sovereign debt crisis continues to bite.
In a live interview with Channel 4 News last week, King said the Bank does not “have a crystal ball” when predicting UK growth.
But he said: “I think we are beginning now to see a few signs of a slow recovery but it will be a slow recovery. After a banking crisis, one cannot expect to get back to normal and I fear it will take a long time.
“It will depend critically on what happens in the euro area and the rest of the world. The [United] States is struggling a bit, Brazil and China are slowing.
“I think our fate in terms of speed in which we come out of the state we are in very much depends on what happens in the rest of the world.”
King says he expects growth to rise during the next quarter of the year.
On banking reform, King said he would prefer to see a total separation of retail and investment banking rather than the ring-fence proposed by the Government.