LONDON, Feb. 10 (UPI) -- The British economy will take longer to recover and inflation should peak at 3.5 percent early in 2010, Bank of England officials said Wednesday.
In the quarterly Inflation Report, bank Gov. Mervyn King said Britain's economy would "bump along the bottom," although he expressed hope for a "gradual recovery" in output, The Times of London reported.
In the report, the Bank of England said the country's emergence from recession was weaker than expected. Last month, the gross domestic product rose by 0.1 percent.
While the outlook for GDP growth was similar to November forecasts, King said, "The pace of recovery is somewhat less strong than three months ago."
The Inflation Report also predicted inflation will spike at about 3.5 percent early this year. While inflation was predicted to rise above the 2 percent target forecast in December, the uptick was expected to be temporary, the report said.
The bank's expectation of the temporary increase in inflation along with the slower GDP growth rate indicated interest rates will be kept low longer than economists had forecast, The Times said.
