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Reported on Tue, 13 Jun 2006

British companies should brace themselves for a time of turbulence in the world markets and the domestic economy, according to the governor of the Bank of England, but taking out a business loan could offer support.

Speaking to business leaders in Scotland yesterday, Mervyn King alerted his audience to the potential effects of recent fluctuations in global stock markets, alongside the results of raised commodity prices and an increase in household bills.

He warned that although "a rebalancing of global demand is desirable", the disrupted conditions experienced currently in the emerging markets could spread to ensure that "the way ahead may not be smooth".

Mr King concluded that "after a period of robust economic growth, we approach a somewhat bumpier stretch of the road".

However, he raised hopes that the torrid period could be temporary in its impact, with inflation kept close to the government's two per cent target and wage pressures remaining muted.

Companies concerned about their profits in a time of volatility could take out a business loan to get themselves safely through a difficult period.


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