After the party, the hangover looms: London's golden Olympics may soon be a distant memory as Britain returns to the reality of its economic mess and years of more belt tightening, Reuters reported. The 2012 Games have lifted the nation's spirits, but the government has few alternatives to an austerity drive that may last for the rest of this decade - although some academics and economists believe yet more radical policies may be needed.

An outgoing member of the Bank of England’s Monetary Policy Committee has challenged the governor Sir Mervyn King for his insistence that central banks should buy only government bonds in quantitative easing programmes to stimulate growth. Adam Posen told the Financial Times that the BoE could be much more effective in fostering economic recovery if it ditched “anguished religious ethics” over what it considered reasonable intervention.

Britain’s exports fell sharply in the second quarter, highlighting the difficulty the UK economy faces as it tries to recover amid slowing global growth, the Financial Times reported. Goods exports fell 3.1 per cent in volume terms as the UK recorded its biggest trade deficit for at least 15 years. David Tinsley, economist at BNP Paribas. described the data a “spectacularly bad”. The rumbling crisis in the eurozone, the destination of about 40 per cent of the UK’s exports, has been compounded by slowing growth in the US and emerging markets such as China.

Bank of England Governor Mervyn King said the bank will "do all it can" to pull the economy out of recession, signaling further bond purchases using freshly created money, but ruling out a near-term cut in the key interest rate, The Wall Street Journal reported. Presenting the BOE's quarterly inflation report, in which the bank lowered its growth and inflation forecasts, Mr. King said the BOE will do its utmost to support the economy, and indicated that support will be channeled through a program known as quantitative easing that already totals 375 billion pounds ($585.79 billion).

Britain's economy is stuck in its bid to beat recession, with data on Tuesday showing retail sales growth slowed in July and manufacturing tumbling in June - presaging another cut to the central bank's growth forecast, Reuters reported. Bank of England governor Mervyn King looks set to give one of his notoriously gloomy outlooks for Britain, which is in recession as the euro zone debt crisis, government spending cuts, bad weather and one-off factors are hurting the economy.

The Bank of England looks set to slash its growth and inflation forecasts for 2012 and beyond on Wednesday, bolstering expectations for more economic stimulus later this year as Britain's economy remains stuck in recession, Reuters reported. Inflation is falling faster than expected while the economy has suffered hits to growth from the euro zone debt crisis, government austerity and some one-off factors, raising the question of whether the Bank will announce extra asset purchases before the current round is complete in November.

Personal insolvency figures are likely to show a slight fall, although many people are still living on the brink with "unmanageable" debts, analysts have warned, The Press Association reported. The Insolvency Service is set to publish its report for the second quarter of this year, after the one for the first quarter showed the number of people declared bankrupt had risen for the first time in a year.

Dewey & LeBoeuf LLP’s U.K. administrators proposed liquidating the defunct law firm’s British assets last week a day after the German operations were put in insolvency proceedings by a Frankfurt court, Bloomberg reported. The U.K. partnership, which includes the London and Paris offices, should be moved into liquidation, administrators at BDO LLP said in a July 27 regulatory filing. White & Case LLP attorney Andreas Kleinschmidt was appointed preliminary administrator July 26 in Germany, according to the country’s online insolvency registry. Dewey’s U.S.

Mouchel Group Plc said it agreed to a restructuring that will give its lenders a majority interest in the British infrastructure firm and delist the company to avert an impending debt default, Reuters reported. The restructuring -- supported by Royal Bank of Scotland, Lloyds Banking Group and Barclays -- will result in the lenders releasing 87 million pounds of Mouchel's existing debt for a majority stake in the company. After the debt-for-equity swap, Mouchel will be left with 60 million pounds of outstanding debt.

Creditors of bankrupt refiner Petroplus's UK operations, mainly the Coryton refinery, will be paid a maximum of just 6.4 percent of their claims, said Steven Pearson, a joint administrator at PwC. The creditors will receive $102 million to $135 million, while their claims are estimated to total $2.1 billion to $2.4 billion, Pearson said on Tuesday. He said that losses of $22-$31 million, sustained in runnning the refinery between January and June, had reduced the amount available for distribution and demonstrated why he had to take the decision to close the plant down.