Central bank governor: British economy only in 'modest'recovery

Bank of England Governor Mervyn King said in a television interview on Sunday that Britain's economy had achieved "only a modest recovery". "We are seeing a recovery. It's only a modest recovery, and we certainly can't be satisfied with it," the outgoing central bank governor King said in an interview with the Sky News' Murnaghan program. "We will need to do more to use up the spare capacity and to get back to a healthy, growing economy. But we are in a recovery period now," said King, who will step down and be replaced by Mark Carney, now head of the Bank of Canada. The British central bank upgraded its forecast for British economic growth last Wednesday for the first time since the 2008 financial crisis. Speaking of the challenges facing the British economic recovery, King reiterated that the single biggest risk for the recovery was the continued eurozone weakness. He also warned of the threat of the government's Help to Buy scheme. King said that scheme was "too close for comfort" to the U.S. mortgage guarantee schemes that triggered the 2008 financial crisis. The Help to Buy scheme, due to start in January 2014, is a government-backed mortgage scheme, aiming to boost the housing market and also help British economic recovery. In response to King's criticism, British Treasury Minister Danny Alexander told BBC that the scheme was never intended to be permanent but limited to three years.