Fears of deep recession grow
By Catherine Woods, published 1 year ago in Finance & Banking.
Further interest rate cuts seem on the cards after a projection from the Bank of England suggesting the economy will shrink by 2 per cent next year and inflation will fall below 1 per cent in 2010.
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A gloomy Mervyn King says he doesn’t know how bad 2009 will be. He’s quoted in the Guardian as saying: "It's almost certain that output will fall in both the third and fourth quarters of this year, and I don't know where it will go after that.
Inflation currently stands at 5.2 per cent but is now widely believed to be [asset1], providing relief for small business owners such as Grazing managing director Sam Hurst.
“Inflation is one of my major concerns but I’m less concerned about it now compared to two months ago. Prices seem to have stabilised recently,” he says.
Sterling has dropped following the bank's report.
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