14 Aug 2008

5% inflation forecast for UK

12:04 pm on 14 August 2008

There's been a gloomy assessment about the British economy from its top banker.

Bank of England governor Mervyn King says inflation will hit 5% before the end of the year, more than double its inflation target of 2%.

Dr King also warned the economy may be heading into recession. The announcement saw the British pound fell against its American counterpart to its lowest level in nearly two years.