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 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.