The economy faces a “choppy recovery” the Bank of England warned today as it revised its economic growth forecast for 2011. It said that it now expected the economy to grow by about 2.5% in 2011, down from its previous forecast of about 3.4%. Mervyn King, governor of the Bank of England, said: "It will take many years before bank balance sheets and fiscal positions return to anything like normal. "In the meantime they will act as headwinds to the recovery." In the Bank's Quarterly Inflation Report it said that inflation would fall below its 2% target in two years time. The central bank sharply revised up its 2011 inflation forecasts but said price growth would slow rapidly to around 1.4% the following year, when a January 1 2011 increase in value-added tax drops out of annual comparisons. The most recent official figures showed that Consumer Prices Index inflation stood at 3.2% in June, above the Bank's target rate of 2%. Retail Prices Index inflation, which includes housing costs, was higher still, at 5%. The growth and inflation forecasts came after the latest official unemployment data showed a further fall in the jobless total. The number of people unemployed in the UK fell by 49,000 to 2.46 million in the three months to June, according to the Office for National Statistics. This is the second consecutive month that the jobless number has fallen.