Sir Mervyn King issues gloomy financial forecast

Bank of England Governor Sir Mervyn King has said he is "pessimistic" over the chances for a eurozone recovery and warned Britain is still not halfway through the financial crisis.

In a gloomy Treasury Select Committee hearing, Sir Mervyn braced Britons for at least another five years of pain as he saw no sign yet of an end to the global financial woes.

The Bank chief told MPs he was "struck" by the speed at which the economic outlook was deteriorating as the eurozone crisis deepened, with conditions now worsening in previously booming areas such as Asia and other emerging markets.

He said he was "pessimistic and particularly concerned" as the problems in Europe continue without any decisive action.

Sir Mervyn added nobody expected the financial crisis that began in 2007 to have lasted so long, but said: "I don't think we're halfway through it".

He added: "My estimates of how long it will take to recover is expanding all the time."