by Calculated Risk on 11/13/2008 01:06:00 AM

From The Times: Economy faces sharpest downturn for 30 years

The British economy faces its toughest year in almost three decades, the Governor of the Bank of England said yesterday. Mervyn King gave warning of “very difficult times” ahead and an even sharper recession than that of the early Nineties.
...
In a dire forecast, the Bank predicted that the economy would shrink next year by up to 2 per cent. A slump on this scale would outstrip even the brutal downturn of 1991, when GDP fell 1.4 per cent. It would mark the economy’s gravest year since 1980 ...

The report said that the slowdown could be deeper and longer lasting if banks continued to curb their lending, if consumers and businesses had to cut spending even more sharply and if unemployment climbed even more rapidly than is feared.