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 It is unlikely that the Bank of England will cut interest rates until at last June according to economists.
The costs for borrowers have already been cut three times this year since last December.
Global Insight economist Howard Archer described how the fact that there is evidence of the effects of the credit crisis "heightens concern that the UK economic downturn is deepening."
Mr Archer also commented that this "adds to the pressure on the Bank of England to quickly cut interest rates again despite current elevated inflation levels and risks."
Inflation may soar up to three per cent from 2.5 per cent this year due to increases in fuel and food costs meaning that BoE governor Mervyn King must write a letter of explanation to Chancellor Alistair Darling.
Many experts have said that the credit crisis is over in the US but that the economy overall in the country is still in poor shape according to Channel New Asia.
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