London - British Prime Minister Gordon Brown on Wednesday, for the first time, acknowledged that Britain faces a recession.

"We must now take action on the global financial recession which is likely to cause recession in America, France, Italy, Germany, Japan and, because no country can insulate itself from it, Britain too," said before parliament.

Up until now, Brown has avoided using the phrase "recession" when describing Britain's economic situation.

The statement comes a day after Bank of England governor Mervyn King also referred to a British recession. Analysts expect the central bank will cut its prime interest rate by half a percentage point when it meets in November.

Recession fears weighed on London markets, with the FTSE falling by 3.5 per cent toward midday. (dpa)