EU crisis hitting UK growth -- BoE chief
THERE is no end in sight to the euro crisis, the governor of the Bank of England said yesterday, while Italy said the slowing economy there means it will miss budget goals.
The comments come after the Bank of England cut its UK growth forecasts, and said the outlook is "unusually uncertain" in part because of the crisis in the UK's nearest trading partners.
Bank of England governor Mervyn King said the gloomy outlook for the euro area is impeding Britain's economy.
"If the rest of the world were growing normally, the rebalancing and recovery of our economy would be much easier," he said.
He added that the UK's long-term economic performance will depend on measures such as "reforming our banking system so that banks focus less on making money in the short term, and more on building businesses to serve their customers."
Mr King's job is to be advertised as his term in office draws to an end, the 'Sunday Times' reported yesterday.
Candidates have been told that the post will be advertised in the autumn and that they should register official interest then, the newspaper said, citing an unidentified candidate. King is due to retire in June.
In Italy the Finance Minister Vittorio Grilli said the government there will overshoot its 2012 deficit goal because of worse-than-expected growth.
However, he said Italy is still on target to meet its EU obligations, a newspaper reported.
Last week data showed that Italy, which has had the euro zone's most sluggish economy for more than a decade, slipped further into recession in the second quarter. (Bloomberg, Reuters)