UK on verge of recession, first official warning from Bank of England

Governor of the Bank of England Mervyn King has warned for the first time that the economy is on the verge of recession, and that the it will start to shrink by the end of the year, this will be the first decline since the beginning of the 1990s.

He warned that this could be the worse financial crisis “since the Second World War” with the UK hit by rising oil and energy prices.

He then outlined all the problems families living in Britain are set to face, house prices will continue to fall, inflation will rise to 5 percent or above, and it would be unlikely for a interest rate cut in the near future. He also fears thousands more people will lose their jobs.

New figures out show unemployment rising as quickly as it did in the last recession; unemployment jumped another 60,000 in the last three months, bringing the total to 1.67 million unemployed.

After Mr King gave his forecast, the pound fell to its weakest level against foreign currencies since 1996.

Source: Telegraphdownload rest stop don t look back free