Tuesday, February 26, 2008
The Bank of England’s deputy governor has said the outlook for the UK economy in 2008 has “changed dramatically”.
Rachel Lomax said there was uncertainty over the full impact of "the largest ever peacetime liquidity crisis". The deputy governor believes the credit crisis will significantly reduce demand over the next two years.Inflation is also forecast to rise more sharply. Ms Lomax warned this may lead to higher interest rates than expected if prices and wages rise further.