Today, the deputy governor of the Bank of England warned that UK is now facing the worst recession in decades.
It is said that further action was required to prevent a prolonged recession, however, there was nothing that could be done to stop a sharp downturn in the first half of 2009. Interest rates could be cut again from their historic low of 1.5%.
Between July and September last year, UK’s GDP fell by 0.6%, and official figures out next week are expected to indicate that output shrank by up to 1.5% in the last quarter of 2008, confirming that the nation is in the grip of a sharp slowdown.
This came as ministers prepare to thrash out new schemes to help boost bank lending over the weekend. Large amount of small businesses are struggling to survive as their access to credit is cut off due to banks cutting back on lending.