May 16 - Bank of England Governor Sir Mervyn King warns of the ''risk of a storm heading our way from the continent'' as he flagged the euro zone as the greatest threat to the UK's recovery. Rough Cut (no reporter narration).
ROUGH CUT - NO REPORTER NARRATION Mervyn King's warning came as the Bank said the UK economy will not return to pre-financial crisis levels before 2014 after it cut its growth forecasts for the next two years. The Bank now expects growth of around 0.8% this year. And the squeeze on consumer spending is set to maintain its grip as the rate of inflation falls more slowly than previously expected, remaining above the government's 2% target for the next year or so. While the Bank said it did not see a "meaningful way" of factoring in an extreme financial event - such as the collapse of the euro - into its projections, it said the biggest risk to recovery stems from the single currency bloc, the UK's main trading partner.