The Bank of England (B of E) predicts that the UK will not succumb to a double-dip recession, but warns that its growth prospects are uncertain.
According to governor Sir Mervyn King, economic developments are likely to be characterised by a "zigzag" pattern of gains and setbacks throughout the year.
Sir Mervyn noted that Britain's financial environment is taking its toll on the nation's consumers in the form of unemployment, reduced spending power and negligible savings returns.
A number of households are in need of debt help, with the typical amount owed just under £8,000.
The governor said: "These are consequences of the painful adjustment prompted by the financial crisis and the need to rebalance our economy.
"Unfortunately there is no easy remedy."
He does, however, predict a gradual recovery.
It follows a similar prediction from the Confederation of Business Industry (CBI), which also believesthat the UK will avoid recession.
However, the CBI states the any successful recovery will be heavily dependent on how the eurozone crisis is resolved.
Posted by Kim Burns
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