The Bank of England (BOE) failed to predict the potential severity of the ongoing economic crisis before it began, one senior executive of the establishment has admitted.
Deputy governor of the BOE Sir John Gieve - who is due to retire from his position in March - explained that officials underestimated the credit crunch and the rapid fall in house prices and so failed to halt the financial slide.
It is now believed that the UK is heading into a severe and long-lasting recession.
In an interview with the BBC, Sir John said: "Why didn't we see that it was so serious? I think that's because we, perhaps, hadn't kept pace with the extent of globalisation."
He went on to call interest rates a "blunt instrument" and said that tools needed to be developed to sit somewhere beyond interest rates and affect the whole economy.
Meanwhile, the retail sector is continuing to be hit by pre-Christmas sales discounts, it has been reported.
Re-mortgage:- JST Financial, New Mortgage, Re-mortgage Specialists catering for good and adverse credit for UK homeowners