Haven't we got the message yet?

The Bank of England governor and an influential think tank have predicted that the UK economy is likely to sink into recession in 2009. Mervyn King told business leaders in Leeds he was concerned about rising unemployment and falling house prices. Economic fears sent the pound plunging to a five-year low against the dollar. Meanwhile, the National Institute of Economic and Social Research says the UK is on the brink of its first full year of recession since 1991. The Bank of England has also been criticised for being too slow to cut interest rates in response to the UK's worsening economic situation.

Link to BBC News - includes a short video clip of Mervyn King's statement.

Also, see the set of charts that Geoff Riley has put together on tutor2u blog entitled 'In the Long Run'. Think about the impact of short run fluctuations against long run trends. (Link)