London: The Bank of England on Wednesday said the
timing and strength of economic recovery remain "highly
uncertain" even though the stimulus could help in improving
the British economy.
Hit by the global financial turmoil, the European
economic major is mired in recession and is witnessing
a climbing unemployment rate.
"The stimulus should lead to a slow recovery in
economic activity, but the timing and strength of that
recovery remain highly uncertain," the Bank of England said in
its latest inflation report.
The apex bank noted that the recession in the country
appeared deeper than "previously estimated and GDP fell
further in the second quarter of 2009".
UK GDP was estimated to have contracted 0.8 per cent in
the second quarter of 2009.
To tide over the financial crisis, the government has
come up with various measures including the asset purchase
programme worth 175 billion pounds.
Reflecting the fragile economic scenario, the country saw
the unemployment rate jump to 7.8 per cent in June, reportedly
the highest in 13 years.
"Credit conditions are likely to remain tight as banks
continue to repair their balance sheets, and past falls in
asset prices and high levels of public and private debt will
weigh on spending," the statement noted.
Last month, the International Monetary Fund projected the
UK economy to shrink 4.2 per cent in 2009.
Bureau Report
First Published: Wednesday, August 12, 2009, 20:48