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Date: Tuesday 26 Aug 2008

LONDON (ShareCast) - There’s still a “long way to go” before we see the end of the current economic crisis, warns Bank of England Deputy Governor Charles Bean.

Inflation is way over 4% and set to go higher and UK households are struggling to cope with soaring food and fuel prices and rocketing energy bills. Falling house prices are also denting confidence, making this rough patch “as challenging a time as back in the 1970s”.

“Last year this was a financial crisis that we thought with a bit of luck would be over by the time of Christmas, but it has dragged on for a year and looks like it will drag on for some considerable time further yet," Bean told the BBC at a conference of central bankers in Wyoming.

“We have our fingers crossed but there is the recognition there is still quite a long way to go yet."

He added that every time it looks like things might improve “another grenade explodes, another bout of fear of sustainability of some financial institutions”.

Data released Friday revealed that Britain is edging closer to recession. The economy ground to a halt between April and June, according to the Office for National Statistics.

Annual growth came in at its weakest since the end of 1992, having been revised down to 1.4% from 1.6%.

"One would hope that the conditions in credit markets should gradually start to improve and those two factors will help to ensure growth will start to pick up as we go through next year,” said Bean.

“Hopefully we can go back to something like the steady growth that we experienced over the past decade."

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