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 Bank of England governor Mervyn King has dismissed the possibility of the Bank cutting interest rates in a similar way to the US' Federal Reserve, according to reports.
The governor said that while the current economic climate made a cut in the interest rate a distinct possibility, it will not be a large slash of rates as has been seen across the Atlantic, suggesting consumers could still face financial difficulties.
Speaking to the Treasury select committee to discuss the February inflation report, Mr King said the Bank had a "difficult balancing act" if it was to meet its inflation targets, predicting inflation could hit three per cent in the coming months.
Financial Difficulty | Sell and Rent Back your home
"Surveys suggest that the economy has slowed, but so far modestly," Mr King said. "The world economy, particularly the US, has weakened."
He also stressed however, that it was "important for people not to confuse a slowdown in the world economy with words like depression".
The current rate of interest is 5.25 per cent, with the next decision due on April 10th.
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