[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Monday, 12 June 2006, 21:20 GMT 22:20 UK
Economy faces bumpier time - King
Mervyn King, Bank of England Governor
Mr King says price pressures are being felt in all major economies
The global economy is set for a more turbulent time after a period of strong economic growth, Bank of England governor Mervyn King has warned.

Mr King told business leaders in Scotland that recent fluctuations in stock markets reflected an economic outlook which was "far from certain".

Inflation was "volatile", with higher crude oil and gas prices beginning to have an impact on household spending.

But he stressed inflation was on target and was not yet "a serious concern".

Rates move

Fears about rising prices in the US have led to significant volatility on major stock markets in the past six weeks.

Some economists believe the Bank of England's Monetary Policy Committee could be persuaded to raise interest rates later this year, having kept them fixed at 4.5% for the past ten months.

The way ahead may not be smooth
Mervyn King, Bank of England Governor

Mr King acknowledged that the economic climate had become more uncertain in recent months.

"After a period of robust economic growth, we approach a somewhat bumpier stretch of the road," Mr King said.

"A rebalancing of global demand is desirable but the way ahead may not be smooth," he added.

Nevertheless, he said UK inflation was close to the government's 2% target and that wage pressures remained muted.




RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific