Bank of England Governor Mervyn King said on Monday the euro zone crisis was likely to cause Britain's economy to stagnate over the next six months, and that he was particularly concerned about the effect on Britain's banks.

A credit crunch appeared to be taking root in parts of continental Europe, and that risked pushing up the cost of borrowing in Britain, King said in testimony to a committee of legislators.

King's comments come just after the Organisation for Economic Cooperation and Development said Britain had probably already tipped into recession, and ahead of updated government growth and borrowing forecasts due on Tuesday.

I don't think it's as bad here as it is in the euro area economy, where ... the deleveraging of euro area banks is leading to early signs of a credit crunch, with concerns that it will get worse, King said.

These are enormous challenges and it will not be easy to get through this, and there will I think need to be a significant amount of rationalisation of debts and credits in the world before we are finally to emerge from the end of this.

King's comments about the weak growth outlook reflect the forecasts published in the Banks's November Inflation Report, which also point to inflation falling sharply from its current 5 percent to well below 2 percent by the end of next year.

This sharp projected fall in inflation, together with the marked deterioration in the outlook for growth, prompted the Bank to restart its quantitative easing programme in October. It aims to buy an extra 75 billion pounds of gilts by February, taking the total to 275 billion pounds.

Other Monetary Policy Committee members appearing alongside King -- executive director for markets Paul Fisher and external members Martin Weale and Ben Broadbent -- also broadly shared the downbeat outlook for growth.

The latest evidence from Sir Mervyn King and other members ... reinforce the belief that it is very much a question of when, rather than if, the Bank of England will enact more quantitative easing, said Howard Archer, an economist at IHS Global Insight.

Most economists expect the Bank to vote for at least a further 50 billion pounds of QE in February.

At an event in New York, the MPC member who has led calls for more monetary stimulus over the past year, Adam Posen, said that economic stagnation was his biggest concern for the next 3-5 years.

It's not about inflation or deflation, it's about very large, real shocks bumping the economy up and down around a relatively austere, low-growth path, he told the Council on Foreign Relations.

(Additional reporting by Olesya Dmitracova, Peter Griffiths, Stephen Mangan and Philip Baillie in LONDON and Leah Schnurr in NEW YORK; editing by Ron Askew)