British economy will be shielded by the Bank of England Governor, Mervyn King from the Eurozone debt crisis, as the Government is going to prepare an emergency Budget on June 22 to tackle the debt burden.

The amount of Budget cuts needed could put the economic recovery in danger and the nation will be plunged back into the slump, after it surfaced from its worst recession last year. In the first quarter, GDP escalated to 0.3%, which is slower than the 0.4% speed recorded in the previous three months.

The quantitative easing programme of bond holdings at £200bn will also be maintained by the bank.

Some of the policymakers are feeling uneasy about price pressure, while a few economists witness a small possibility of a rate increase before the end of this year, with inflation running 3.7%, which is almost double the 2% target.

Howard Archer, Economist at IHS Global Insight said, “Relative muted recovery following deep recession, the looming major fiscal squeeze and the risk to UK economic activity coming from the Eurozone debt crisis makes a strong case for the BoE to keep its finger off the interest rate trigger in the near term at least”.