'The economy probably entered recession in the second half of 2008 and output is likely to contract further,' said the Bank of England in its latest quarterly report. -- PHOTO: AP
LONDON - THE Bank of England said on Wednesday that the British economy was probably already in recession as a global financial crisis takes its toll.
'The economy probably entered recession in the second half of 2008 and output is likely to contract further,' the central bank said in its latest quarterly report.
Inflation to fall below 2%: BoE
LONDON - THE Bank of England warned on Wednesday that it expects inflation to fall below the government's target of 2 per cent next year as the economy contracts further, stoking expectations that the Bank will lower its benchmark interest rate - possibly to the lowest level ever.
Inflation rose to 5.2 per cent in Sept, under severe upward pressure from fast-rising food and fuel prices.
Britain's economy shrank 0.5 percent in the three months to Sept from the previous quarter, marking the first contraction since 1992, according to recent official data.
The economy had already shown flat performance in the second quarter with zero growth. However, Britain is not officially in recession unless it reports two quarters running of negative economic growth, or contraction.
The BoE statement implies that the central bank believes that the economy is contracting in the current fourth quarter, or three months to the end of Dec. -- AFP
