Bank governor Sir Mervyn King warns of hard times
- 28 November 2011
- From the section Business
UK economic growth will be "flat or close to zero" over the next six months, Bank of England governor Sir Mervyn King has told MPs.
He told the Treasury Select Committee: "The outlook for output growth in the near term is considerably weaker than even three months ago."
Sir Mervyn's comments came on the day that the OECD warned that the eurozone and UK could be entering a recession.
Asked about the OECD report, Sir Mervyn said he had not yet read it.
As with the OECD's analysis, Sir Mervyn blamed the eurozone's debt crisis for contributing to the UK's economic problems.
He said there could be a particular impact on export growth.
"I think it is very hard to give a worst-case scenario from that (eurozone impact). Many things could happen and an awful lot will depend on the politics of it.
"What I would say more generally is that what we are facing is a situation in which some painful adjustments need to be made.
"And those painful adjustments will need to be made both for creditors and debtor countries, and those painful adjustments will need to be made irrespective of how the euro crisis plays out and so there is no easy way out of this," Sir Mervyn said.
Even if the eurozone crisis was resolved any time soon, it was Sir Mervyn's prediction that UK growth for the whole of next year would not be "rapid".
He did, however, repeat his belief, that factors that had led to the UK's sharp rise in inflation this year "are diminishing".