Bank governor Sir Mervyn King warns of hard times

Sir Mervyn King: ''We don't see rapid growth at all''

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".

More on This Story

Global Economy

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.