Bank Of England Governor Mervyn King publicly warned of a recession in the UK, the first public figure to make such an announcement, acknowledging that the UK economy faced a 'long slow haul' ahead to redress the problems that we are currently faced with.In contrast Gordon Brown and Alistair Darling have avoided the use of the word 'recession' even though such an event is blatantly staring us in the face. This is what Mr King had to say:
"A recession looms because the credit squeeze came at a time when disposable incomes were falling due to rising energy and food prices... taken together, the combination of a squeeze on real take-home pay and a decline in the availability of credit poses the risk of a sharp and prolonged slowdown in domestic demand."In the US, Treasury Secretary Henry Paulson has said:
"Clearly, we're going to have a number of difficult months ahead of us in terms of the real economy,"in a TV interview yesterday, in contrast to what he was saying a few months ago claiming that the crisis would be short-lived and expecting a recovery by the end of the year. If we were expecting politicians to be consistent, we would be disappointed - However, we're a bit wiser than that...
This comes just a week after the announcement of a Government investment of $250bn in US banks. The Federal Reserve has $540bn ear-marked for bank-rolling....
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