King: Higher inflation for 'significantly longer'

Bank of England governor Mervyn King says growth is going to be weaker than previously expected and inflation is likely to above the 2% target until the end of 2011.

Here is his full speech on today's August Inflation Report: At the time of the May Report, the financial crisis had evolved into a sovereign debt crisis in Europe. Given the subsequent fiscal announcements, and the publication of the European Bank stress tests, has that difficult time passed? Up to a point. But whereas crises occur suddenly, they fade only gradually. It will take many years before bank balance sheets and fiscal positions return to anything like normal. In the meantime they will act as headwinds to the recovery. But continuing monetary stimulus and the earlier deprecia...