King warns of recession
THE Governor of the Bank of England has warned “it now seems likely” the UK economy is entering a recession.
Mervyn King, pictured right, said the UK faces a “long, slow haul” to repair the economic fall-out from the recent banking havoc.
The banking system faced its biggest threat for almost 100 years after an “almost unimaginable” chain of events set in train by the collapse of Lehman Brothers in September, he said in a speech to business leaders in Leeds last night.
But the recapitalisation of the banking system - including £37bn for Royal Bank of Scotland, HBOS and Lloyds TSB - will come to be seen as “the moment... when we turned the corner”, he predicted.
Mr King might have warned that recession was “likely” but an army of other experts firmly believe the economy is already in a downturn.
Respected bodies such as the European Commission, the Organisation for Economic Development and business lobby group the CBI have said the UK economy started shrinking in July.
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