FSA warns UK recession may be worse than forecasts

Mon Feb 9, 2009 12:19pm EST

By Myles Neligan. Story sourced from Reuters.com

LONDON, Feb 9 (Reuters) - Britain is at risk of a deeper-than-expected recession as a dearth of bank credit exacerbates falls in house prices, consumer spending and business investment, the country's financial watchdog said.
The Financial Services Authority said while economists on average expect Britain's economy to contract by 2.2 percent this year, before returning to growth in 2010, the weakened banking sector meant this forecast may prove optimistic.

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