Mervyn King calls for caution

The Governor of the Bank of England Mervyn King has warned the Government against another round of spending to get Britain out of recession but ministers are playing down suggestions of a rift.

More borrowing is expected to be approved in next month's Budget after the £20bn "fiscal stimulus" before Christmas.

Mr King told a committee of MPs that there was still time for the first stimulus package to have an effect on the economy.