Bank of England Governor Mervyn King has warned that next year will be a ‘painful’ one for Britain as the slowdown in the housing market deepens and the cost of living rises further.

Angela Monaghan, The Telegraph – 13 August 2008

Its long-awaited quarterly Inflation Report provided gloomy reading with the Bank now expecting the economy to virtually ground to a halt in the first three months of next year as the surge in petrol and utility bills eat away at consumers’ spending power.

The Bank expects the economy to grow just 0.1pc in the first quarter, down from a projection of just 1pc made at its last report in May.

The downward revisions will be embarrassing for Chancellor Alistair Darling, who is still forecasting that the flagging economy will muster growth of 2pc this year and 2.5pc in 2009 – Full Article

See Also – Bank of England Inflation Report – August 2008