Business News - Bank of England warns of tough times ahead

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Bank of England warns of tough times ahead

LONDON (UPI) -- The Governor of the Bank of England, Mervyn King, warns Britain is facing tough economic times ahead.

"The nice decade is behind us," King said.

In a quarterly report on inflation Wednesday, King said Britain would face rising food and energy costs, an economic slowdown amounting to 1 percent growth for 2008 and decreases in pay raises, The Daily Mail reported.

King also said the housing market would deteriorate "markedly."

He also said the BOE should not take a heavy hand in helping the economy as it adjusts to new realities.

"We are traveling along a bumpy road as the economy re-balances. Monetary policy shouldn't try to prevent that adjustment," King said.

"The message would seem to be that the Bank's rate-setting committee expects to cut rates only once more at the most," economic analyst Jonathan Loynes of Capital Economics said in response to King's statements.

Copyright 2008 by United Press International

This news arrived on: 05/15/2008

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