The British economy faces its toughest year in almost three decades, the Governor of the Bank of England said yesterday. Mervyn King gave warning of “very difficult times” ahead and an even sharper recession than that of the early Nineties.

Gary Duncan, Economics Editor and Philip Webster, Political Editor, The Times – 13 Nov 08

His bleak assessment set the stage for further drastic cuts in interest rates — which some experts say could fall as low as 1 per cent.

Unemployment rose by 140,000 to 1.82 million in the three months to September and is predicted to exceed two million early next year. The Bank raised the spectre of deflation, reviving fears of a downturn on the scale of the Great Depression of the Thirties. Full Article

Bank of England Inflation Report – November 2008