Recession almost over, a year after Lehman collapse: BoE, Fed Reserve

The recession could be over, and there were now signs that economic activity was picking up at a global level, Mervyn King, the governor of the Bank of England said yesterday, a year after the collapse of Lehman Brothers, an event that set off the US economy's worst recession since the 1930s and pushed the world into a financial chaos.

In the US, Federal Reserve chairman Ben Bernanke also struck the same note, saying that recession is likely over, though he cautioned that the recovery would be slow and it would take time to create jobs.

Speaking before the House of Commons treasury select committee, King said, "following a precipitate fall in economic activity at the end of last year and the start of this, there are now signs that growth has resumed in the third quarter."

His comments followed official data released yesterday indicating a month-on-month 1.4 per cent rise in house prices in July.

Consumer prices index, the government's preferred measure of inflation, dipped from 1.8 per cent in July to 1.6 per cent in August, its lowest level in four years. Steep rises in food and fuel prices pushed CPI to a peak of 5.2 per cent in September 2008.

This fall was less than expected with high petrol prices offsetting fall in food prices; the cost of fruit, bread, cereals, vegetables and meat, as well as non-alcoholic drinks, all had a downward effect on the index.