Official figures indicate that Britain is on the verge of recession as output ground to a halt between April and June this year, the poorest performance since 1992.
Jonathan Loynes, of Capital Economics, is quoted in The Times:
"The economy now looks set to grow by just 1.2% or so this year, with a very strong chance of a technical recession in the second half. And things will be considerably worse in 2009."
The pressure is now on the Bank of England to wake up to the threat of recession and to cut rates. However, given that Mervyn King has already publicly admitted that Britain may well slip into recession, it would seem that he is prepared to allow this to happen; ie there will be no rate cuts.