The Governor of the Bank of England, UK's central bank, gave a grim warning about Britain's financial future, saying it is facing the "biggest threat in 20 years," local media said Thursday.
Speaking at the annual dinner for the Bankers and Merchants of the City of London on Wednesday, Mervyn King said consumers could expect sharp rises in gas and electricity prices, and a steep fall in purchasing power with no pay rises likely, according to Sky News.
With bigger bills but no increases in take-home pay, consumer spending will be squeezed more than during the credit crunch, he said.
King said "Rising fuel, gas, electricity and food prices mean that average real take-home pay will stagnate this year."
However, it is only a temporary slowing in the growth of the real take-home pay, he added.
The central bank chief said targeting inflation, through stemming pay rises and higher interest rates, was among the priorities.
Meanwhile, Chancellor of the Exchequer Alistair Darling renewed calls for a pay restraint in the public and private sectors.
Darling acknowledged that "times are tough," but insisted that the UK would avoid recession.
Source: Xinhua
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