As the recession deepens, a report from The Bank Of England's quarterly Inflation figures, said there will be near zero growth for 2012. There were, predictions for growth by 1.2% at the beginning of the year. But worryingly this is its second downgrade in forecasts this year.
Speaking at a news conference, King said we are navigating rough waters.
"A year ago inflation was rising and heading towards five per cent. It has now fallen to within touching distance of the two per cent target. The big picture in today's report is of a further decline in inflation as external influences fade and domestic cost pressures ease and a gradual recovery in output. Never-the-less we are navigating rough waters and storm clouds continue to roll in from the Euro area. Output has contracted in each of the past three quarters, but the underlying picture is probably not as weak as the headline data suggests. The extra bank holiday in June is likely to have reduced output in Q2 by around half a per cent, an effect that should unwind in Q3."
These figures will no doubt put Chancellor George Osborne's cost cutting, austerity measures and lack of commitment to promoting small and medium businesses into the spotlight again. Highlighting that the government policies to tackle the recession, aren't working. George Osborne said that economic growth was "disappointing", but that the government had an opportunity to "give its 110% attention and effort and energy".
Written and presented by Ann Salter