Mervyn King, governor of the BoE, highlighted the sovereign debt problems in the eurozone as one of the biggest risks to the UK economy.

"Were they to crystallise, the risks emanating from the euro area have the potential to have a significant impact on the UK economy," he said.

Inflation remains on course to top 5% this year, according to the Banks latest quarterly inflation report, although the BoE still expects this to fall back in 2012.

King declined to comment when asked in a press conference whether the Bank was considering further quantative easing to boost the UK's flagging economy.

Meanwhile, Proskills has called on more support for smaller manufacturing companies to help with government's goal to rebalance the economy.

Proskills chief executive Terry Watts said that too often the government's actions only target larger engineering and manufacturing companies.

"Funding is currently available from government for training, but there are significant gaps in provision, with many small and medium-sized companies in particular unable to help their staff gain the skills which will support their ongoing development," said Watts.

"Well-judged capital spending on skills can underpin long-term, sustainable economic growth and help companies in the process and manufacturing sector build for their future."