King Says ‘Severe’ Market Stress Could Threaten U.K. Economy
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Bank of England Governor Mervyn King said that turmoil in the euro region and in world stock markets poses a risk to the U.K. and could push inflation too far below the 2 percent target.
“Recent developments in world stock markets and in the euro area are of particular concern,” King said in a letter to Chancellor of the Exchequer George Osborne after inflation kept above the central bank’s 3 percent ceiling in data released today. There is a risk of “severe stress and dislocation in financial markets and, were this risk to crystallize, it would have a significant impact on the U.K. economy.”