Wed, 27 Jun 12
The global economic situation is worsening and Bank of England governor Sir Mervyn King has admitted he is "pessimistic" about the short-term outlook.
Even during the last six weeks the situation had changed significantly he said - with problems in Asia and other emerging markets, as well as in the Euro zone.
Sir Mervyn told the Treasury committee: "Over two years now we have seen the situation in the Euro area get worse and the problem being pushed down the road.
"There is just enormous uncertainty out there, I have no idea what is going to happen in the Euro area."
He also said that the situation had gone on for longer than most people had expected.
"When this crisis began in 2007, most people did not believe we would still be here," he said. "I don’t think we’re yet half way through this. I’ve always said that and I’m still saying it. My estimate of how long it will take to recover is expanding all the time.
"We have to regard this as a long-term project to get back to where we were, but we’re nowhere near starting that yet. We’re in a deep crisis with enormous challenges."
As a result, it was hinted the Bank of England may cut interest rates further - from their historic low of 0.5% down to zero.
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