Britain’s economy facing biggest threat in 20 years: Official

June 19th, 2008 - 7:54 pm ICT by IANS  

London, June 19 (Xinhua) The Bank of England governor has said that Britain’s economy is facing the biggest threat in 20 years, giving a grim picture of the country’s financial future, a media report said Thursday. Speaking at the annual dinner for bankers and merchants here Wednesday, Mervyn King said that consumers could expect sharp rises in the gas and electricity prices.

And with no likely pay rise in the near future, there may be a steep fall in the purchasing power, Sky News reported.

King said: “Rising fuel, gas, electricity and food prices mean that average real take-home pay will stagnate this year.”

However, it is only a temporary slowing in the growth of the real take-home pay, he added.

Targeting inflation through stemming pay rises and higher interest rates, is a priority area, the central bank chief said.

Meanwhile, Chancellor of the Exchequer Alistair Darling renewed calls for a pay restraint in the public and private sectors.

Darling acknowledged that “times are tough”, but insisted that Britain would avoid recession.

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