LONDON (AP) -- Britain's recession could be deeper and last longer than expected despite economic rescue plans, the country's financial regulator warned Monday.
The Financial Services Authority released its Financial Risk Outlook saying the risks to the British economy are "weighted to the downside and, while the effects of fiscal stimulus and monetary easing remain unclear, the recession may be deeper and more prolonged than expected."
Figures for the fourth quarter of 2008 showed Britain's economy contracted by 1.5 percent, its biggest drop in output in nearly 30 years.
The Bank of England has indicated a similar rate of decline is likely for the first quarter of 2009. The International Monetary Fund warned Britain was likely to contract by 2.8 percent in 2009 and that it would suffer the deepest recession among the major Western economies.
According to the FSA, economic forecasters predict on average a 2.2 percent contraction in the British economy in 2009, with growth starting to emerge toward the second half of the year.
The Financial Services Authority said firms and consumers plan for a "greater degree of uncertainty than normal."