UK media misinterpret Darling economy comment: report

TOKYO (Reuters) - British media wrongly gave the impression that the finance minister was predicting the deepest recession in 60 years, the Financial Times said on Monday, slightly lifting the battered sterling.

The Guardian newspaper on Saturday quoted Chancellor of the Exchequer Alistair Darling as saying: "(The times we're facing) are arguably the worst they've been in 60 years. And it's going to be more profound and long-lasting than people thought."

But the Financial Times said in its online edition that Darling was underlining the severity of current economic conditions -- the global credit crunch and rising commodities prices -- rather than predicting a great depression.

Currency traders said the FT article gave a slight lift to the sterling, which had fallen to a two-year low against the dollar and a record low versus the euro on Monday.

Darling was echoing comments made earlier in the summer by Mervyn King, the governor of the Bank of England, the FT said, possibly to set the scene for a significant downward revision in the Treasury's growth forecasts this autumn.

"Anyone watching or listening to the BBC at the weekend would be forgiven for believing that Alistair Darling had predicted the UK was facing its deepest recession for 60 years. They would have been mistaken," the FT said in an unsourced report.

It went on to say no one at the Treasury believed the present downturn would match, for example, the recession in the early 1980s, when the economy shrank dramatically and unemployment and inflation soared.

"For all the howls of anguish from the housing market, I have not seen any forecast suggesting things will be as bad this time," the article's author added.

(Reporting by Masayuki Kitano; editing by Sophie Hardach)