Governor of the Bank of England, Sir Mervyn King, has said “Britain could be in the grip of the most serious financial crisis ever and that the global and UK economies have been turned on their heads in the past three months.

Speaking last Thursday evening Bank of England chief stated that the world had changed, and the situation could be even worse than the great Depression of the 1930s.

He argued that it was critical to do the right thing, which in the UK meant the creation of more money.

Sir Mervyn was speaking after the Bank’s Monetary Policy Committee kept rates on hold for the 32nd month in a row at the historic low of 0.5% with investors now believing that rates will not rise until early 2013 at the very earliest.

Since nominal interest rates are already as low as they can realistically go and the Government has ruled out easing back on deficit reduction more QE is really the only thing left as the world slides, towards a very sharp slowdown.

Sir Mervyn dismissed fears that printing more money would trigger dangerous levels of inflation and said Britain’s problem was too little money in the economy, not too much.

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