The Bank of England lifted its estimate for economic growth and forecast inflation to return to its 2 percent target earlier than projected.
The BoE forecast economic growth to accelerate to 0.5 percent in the second quarter from 0.3 percent in first quarter of 2013.
However, the recovery is likely to remain weak by historical standards, the bank said in its quarterly Inflation Report. This is the last quarterly report from Governor Mervyn King as he retires at the end of the next month.
The central bank projects inflation to be around 2 percent in two years' time and to average below 2 percent during the latter part of the forecast period.
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