The economic recovery in the UK is not yet secure and more measures need to be put in place in order to ensure the nation's banks do not pose further threat to the taxpayer, according to the departing Bank of England governor Sir Mervyn King.
In his final speech on Wednesday (19 June), Sir Mervyn said a "modest" recovery in the UK is underway but "growth is not yet strong enough to reduce the considerable margin of spare capacity in the economy", Reuters reports.
He went on to say unnecessarily high unemployment was now a bigger threat to the UK than inflation.
In the speech he welcomed chancellor George Osborne's plan to sell the government's 39 per cent stake in Lloyds Banking Group in order to get the bank back into the private sector.
Sir Mervyn is set to step down at the end of this month after more than 20 years at the central bank. He will be replaced by former Canadian central bank chief Mark Carney.
By Claire Archer