Economic Recovery 'In Sight', Says Mervyn King

Recovery is finally "in sight" for Britain's beleaguered economy, the governor of the Bank of England has said.

Sir Mervyn King said that "momentum" was building within the economy which would become apparent during the course of the current year.

But in an interview with ITV News, he cautioned that it did not mean a return to pre-recession levels of private consumption and public spending.

Instead, he said there would have to be a "big shift" in resources towards exports and manufacturing investment as the economy re-balanced.

"There's no point pretending we can go back to the pattern of demand we saw in 2006-2007," he said.

"We need a big shift of resources towards exports, towards manufacturing and business investment. The consequence of that is we have to accept that private consumption and public spending will not grow as rapidly.

"We will get back to the level of unemployment and the path of output, we won't get back to the pattern in which we had a big trade deficit, consumption was high and exports were relatively weak.

"That balance has to be changed. Policies are in place to achieve it. We are on track to achieve it. Recovery is in sight."

He said that the economy would even have grown last year by 1.5% if it was not for falls in construction and North Sea oil production.

"There is momentum behind the recovery that's coming. And I think that during the course of 2013 we will see the recovering come into sight. When - I can't possibly tell you and it would be silly of me to pretend that I could," he added.

Mr King, who is due to retire from the central bank in June, used similar language when he presented the BoE's quarterly economic forecasts last month.

He will be replaced at the helm by Bank of Canada governor Mark Carney.