King urged to print more money

BANK of England governor Sir Mervyn King is coming under increasing pressure to prop up the economy through further quantitative easing as the recovery shows serious signs of flagging.

One of Britain's leading business groups is today urging the Bank's monetary policy committee (MPC) to "seriously consider" extending its quantitative easing programme beyond the current level of 200 billion as surveys point to a weakening of the UK economy.

The British Chambers of Commerce (BCC) says the MPC, which meets this week, should also avoid a rate hike until "at least" the fourth quarter of the year. City economists - who had been forecasting an interest rate rise by the autumn at the latest - have recently begun to revise their expectations.

National Australia Bank, owner of the Clydesdale Bank, has even gone so far as to predict that the cost of borrowing will not increase until September 2012.