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Bank deputy says financial turmoil will persist

25/08/2008

Bank of England deputy governor Charles Bean has said that turmoil in the global financial markets is likely to "drag on for some considerable time".

In comments cited by the BBC, the senior central banker, who is meeting other central bank chiefs at an annual gathering of senior economists, stressed that the current difficulties in financial markets were a "transitory period" and that growth rates would eventually return to "normal levels".

Mr Bean said that the credit crunch's impact was as severe as that of the economic downturn in the 1970s, adding that the mood at the meeting for the coming year was one of "considerable caution".

He said: "We've got our fingers crossed that things will improve. But there is the recognition that there is still a long way to go yet. It looks like it will drag on for some considerable time further yet."

Earlier this month, the Office of National Statistics said the UK economy had failed to grow this quarter as inflation touched 4.4 per cent in the UK.

On Friday, US federal reserve chairman Ben Bernanke warned that the US' inflation outlook was "highly uncertain" as the country's inflation rate rose to 5.6 per cent.