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Page last updated at 09:54 GMT, Wednesday, 28 March 2012 10:54 UK

BoE governor says Jubilee will affect economy


According to the governor of the Bank of England, Royal celebrations are holding back the economy.

Sir Mervyn King was speaking at a hearing of the House of Lords economic affairs committee and said that the Queen's Elizabeth Diamond Jubilee will negatively affect the UK's economy because it includes an extra bank holiday.

Howard Archer, chief European economist at IHS Global Insight, told the Today programme's Simon Jack that one day's disruption can affect the economy "to a limited extent".

He said that the Diamond Jubilee means that people will be taking extended holidays which may cause some small companies to shut down during that period.

On the UK economy's longer term prospect, Mr Archer said while growth should pick up over the next few years, a number of factors will dampen it such as the government's austerity policies, issues in the financial sector and consumers high debt levels which, he said, are all "likely to weigh down on growth for some time".

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