Britain's economy continues to "bump along the bottom", the Bank of England governor warned today - and coming out of the recession would be slower than he thought three months ago.
Mervyn King lowered November's predictions about the pace of recovery, although he did say that "a gradual recovery in output may now be in prospect".
Mr King said that help for the British economy in the form of £200bn in quantitative easing, along with extremely low interest rates, had helped counter the crisis in the banking industry.
The bank has called a halt to the quantitative easing programme for now, although Mr King said it was too early to say whether printing more money to boost supply would be resumed again in the future.
But there is likely to be more tough times ahead for consumers. It has already been a poor start to the year for high street retailers, thanks to the wintry weather, with sales down on 2009.
Now today's report warns that fear of higher taxes could lead people to put more money into their savings, rather than spending to bolster the economy - and that means bad news for employment, which could fall still further if demand doesn't recover as quickly as companies are expecting.
The weak upturn was flagged up last month when figures showed Britain only just managed to clamber out of recession, with growth in the last quarter of 2009 a disappointing 0.1 per cent. Last week the bank said economic performance was "sluggish" and hinted that recovery would be "gradual".
Prospects for inflation, said the bank, remain "unusually uncertain". More evidence, perhaps that, like the weather, it's becoming far more difficult to make accurate forecasts about the future state of the economy.
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