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King warns Britain of a "sober" decade ahead

Time to come as one of "savings, orderly budgets, and equitable re-balancing", King says.

The Bank of England governor Mervyn King has warned the country of a "sober" decade of saving more and spending less ahead.

Coining an acronym, he described the time to come as one of "savings, orderly budgets, and equitable re-balancing," as against the just passed "nice" (non-inflationary consistently expansionary) decade.

Recovery, he said, would be slow as "history suggests that after a financial crisis the hangover lasts for a while". He was speaking to an audience in the West Midlands on the eve of the government's Comprehensive Spending Review.

While noting that it may take time for inflation to return to its target of 2 per cent, King said the Bank's key role was to provide stimulus when the economy was in need.

Reports say the governor's speech hints at a possible resumption of quantitative easing (QE), whereby the Bank has injected £200bn into the economy so far.

The Chancellor, George Osborne has given the Bank the go-ahead for further QE in case the economy continues to falter, the Guardian reports.