'Large black cloud of uncertainty' over economy, says Mervyn King

The Chancellor, George Osborne, and the governor of the Bank of England, Sir Mervyn King, have announced an ambitious plan to revive the economy by making it easier for banks to borrow money.

The Bank of England will lend up to £80 billion to high street banks on the condition that they boost loans to private customers.

The details were announced this evening at the annual Mansion House dinner in the City of London.

Sir Mervyn argued that further action was needed to stimulate the economy because the eurozone crisis had created uncertainty.