'Worst financial crisis in human history': Bank boss's warning as pound suffers biggest fall for 37 years

Source: Daily Mail

Consumers face higher shop prices, dearer fuel and more expensive holidays after the pound slumped yesterday.

Sterling took a hammering as economic figures showed the UK approaching full-blown recession.

Bank of England deputy governor Charlie Bean warned that the pain is just beginning, calling the situation the 'largest financial crisis of its kind in human history'. The plunge was prompted by the worst set of UK growth figures for 18 years, recording the first time that the economy has officially contracted since 1992. The Office for National Statistics reported UK output dropping 0.5 per cent between July and September. Another fall in the final three months of the year would propel Britain into the first official recession since the days of John Major.

Tory leader David Cameron declared: 'This is the day the recession became real. We have had ten years of a Government saying no more boom and bust. We have had ten years of a Government not putting aside money for a rainy day. Well, that rainy day has now come.'

At one stage, the pound was worth as little as $1.52, prompting speculation that the UK was on the brink of a currency crisis. Although it later rallied, it has lost a quarter of its value against the dollar over the past year.