Recovery hopes took a shot in the arms on Tuesday as Bank of England Governor Mervyn King announced that the country's recovery was risked by persistent problems in the Eurozone and it might need the £200 billion quantitative easing program to be extended.

Answering in front of the Treasury Select Committee, King said that the biggest concern for the country currently emerges from the Eurozone, UK's major trading partner.

The problem with Eurozone at the moment is that while most of its countries showed signs of recovery last year, data released for the last quarter of 2009 reversed the situation indicating stagnation in German economy, and weakness in a few more like Spain and Ireland. Greece is already suffering from a major financial crisis.

The Pound reacted sharply to Mr. King's statement as it dropped to $1.5413 from $1.5539 against the US dollar.

King, however, assured that there was no danger of the UK losing its current debt rating of triple A.

While the country's budget deficit is expected to grow to a record high this year, deputy Governor of the apex bank has forecasted a sluggish recovery for the country.