Recent economic and financial developments In recent weeks, several downside risks to the Bank’s July Monetary Policy Report (MPR) projection have been realised. The European sovereign crisis has intensified, the U.S. credit rating has been downgraded, and a broad range of data has signalled slower global growth. The United States is in the midst of the weakest recovery since the Great Depression.
This is not a surprise as history teaches that recessions involving financial crises tend to be more severe and have recoveries that take twice as long. Recent benchmark revisions show that the U.S. recession was even deeper and the recovery from the trough has been even shallower than previously reported.