Bank warns of recession into 2009

Bank warns of recession into 2009

The UK probably entered a recession in the middle of 2008 and is likely to continue to contract well into 2009, the Bank of England has said.

In its quarterly inflation report, the Bank warned that the economic landscape had changed dramatically since August.

It said that the UK economy could shrink by two per cent over the next year, much worse than its previous forecast.

Bank governor Mervyn King said: “[It is] very difficult to know precisely how long we'll be in recession. I think we probably are in recession now.

“This is a difficult and unprecedented time, but we will come through this. We will come out of recession and get back to a period of low and steady inflation and economic growth.”

Germany has also confirmed that it has entered a recession after government figures showed the country’s economy contracted by 0.5 per cent in the third quarter.

And in further bad news for the economy, BT says it expects to have cut 10,000 jobs by the end of the March.