British Prime Minister Gordon Brown has told lawmakers that the global economic downturn was "likely to cause recession" in Britain.

"Having taken action on the banking system, we must now take action on the global financial recession, which is likely to cause recession in... Britain, too," Mr Brown said during his weekly questioning session in parliament.

A recession is defined as two consecutive quarters of negative economic growth.

Crucial data out Friday (local time) is expected to show that the British economy shrank in the third quarter after zero growth in the second.

His remarks come a day after Bank of England Governor Mervyn King said Britain was "likely" entering recession, with the credit crunch and high inflation combining to pose "the risk of a sharp and prolonged slowdown in domestic demand."

Britain has had to nationalise two major domestic lenders as a result of the credit crunch and earlier this month unveiled a half-trillion-pound ($1.2 trillion) rescue package for the country's banking system.

The country has also had a dispute with Iceland over billions of pounds of deposits by British individuals, local authorities and government agencies in collapsed Icelandic banks.

- AFP