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UK recovery ‘has taken hold’

The UK economy is on the mend, with the recovery officially having ‘taken hold’, according to the Bank of England.

In its latest quarterly inflation report, the Bank stated, ‘In the United Kingdom, recovery has finally taken hold. The economy is growing robustly as lifting uncertainty and thawing credit conditions start to unlock pent-up demand’.

The Bank has raised its economic growth forecasts for this year from 1.4% to 1.6%, and from 2.5% to 2.8% for 2014. Bank of England governor Mark Carney has stated that the Bank will not consider raising interest rates from their current record low of 0.5% until the unemployment rate falls to 7% or lower.

The Confederation of British Industry (CBI) welcomed the news, but warned that there are still ‘hurdles’ to overcome before growth becomes sustainable, and called on the Government to boost business investment and trade.

However, following the release of the report, the Bank of England’s director of markets, Paul Fisher, warned that the economy is a ‘long way from normality’.