Shadow over UK

Mervyn King, Governor of the Bank of England, gave an unhappy assessment today of the prospects for the UK economy. He warned that inflation, driven by commodity prices, would push up a bit while growth would probably slow «sharply» – to below 2% by mid-2008. There were, however, he conceded, «downside risks» to the already downward forecast for growth. And yet King, by downplaying the impact of weaker house prices on consumer spending, was probably not downbeat enough. The Bank’s view of the e...