King warns over UK deficit-papers

Mervyn King said uncertainty about the government's intentions had a direct bearing on monetary policy. He said "a key element in raising the national saving rate is the elimination over time of the structural deficit in the public finances". King also warned inflation was "likely to pick up markedly in the first half of this year". He says inflation is "likely to rise to over 3% for a while", and that it could go even higher if energy prices and indirect taxes were to increase further. However, it is likely to return to target in the medium term.  The ONS reported yesterday UK inflati...