Financial downturn ‘to drag on’: Bank of England official

LONDON, August 25, 2008 (AFP) – The Bank of England’s new deputy governor warned on Monday that the global financial slowdown could “drag on for some considerable time”.

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Charles Bean said that every time the markets began to look like they were becoming steadier, “another grenade” exploded.

He said the downturn was at least as bad as in the 1970s, but predicted growth would pick up and inflation fall next year, provided oil prices and credit markets stabilised.

Bean described the crisis as a “transitory period” that would pass.

The deputy governor, speaking to the BBC from the annual conference of the world’s top central bankers in Jackson Hole, Wyoming, said bankers attending last year’s event believed the crisis would have been over by the end of 2007.

In fact, it had carried on for a year and every time the markets appeared to be stabilising, fears over the credit crunch tossed “another grenade” into financial institutions.

He said the mood at the conference was one of “considerable caution for the nex