Bank of England Governor Warns of Recession
As many people are already experiencing, household bills are rising sharply. This was confirmed yesterday, by Mervyn King, the Governor of the Bank of England who warned families to brace themselves for a further squeeze on their household finances, as energy bills and food prices continue to rise.With inflation set to increase to 3.7% - almost double the official target - the likelihood of further interest rates cuts in theshort to medium term look unlikely. Indeed, we could see the return of stagflation - rising interest rates to counter inflationary pressures, while experiencing falling economic growth.
Mervin King warned home owners to expect further price falls adding that is was impossible to predict the size of these falls. He warned that a sharp downturn in the economy could not be ruled out.
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