Celebrations for the Queen's Diamond Jubilee are set to throw the British economy into reverse again, Sir Mervyn King has warned.
The Bank of England governor said it was "quite possible" that UK plc would shrink over the next three months.
He also signalled that the country still faced a long battle to get back to the kind of growth it enjoyed before the financial crisis.
Sir Mervyn was asked about the impact of the Jubilee as he appeared before the House of Lords Economic Affairs Committee.
The traditional late May bank holiday has been moved to Monday 4 June, and the next day has also been designated a break to mark the event.
"We do expect quite possibly a fall in output in the second quarter, followed by a rise in the third quarter, as we will lose an extra day's work - it doesn't necessarily follow that we will lose that whole day's output - because of the national bank holiday," the governor said.
"Last year we saw that pattern again [due to the royal wedding]. We would expect that to happen again."
Sir Mervyn said it was not yet clear whether the eurozone was taking enough action to deal with underlying weaknesses in some members.
He also indicated that continuing pressure on banks to deleverage was partly responsible for inhibiting their scope to lend.
"Even though funding costs have come down in the first couple of months of this year, they're still higher than they were a couple of months ago because of what's going on in the euro area," he added.
He said he did not know whether the Bank would need to launch a fresh round of quantitative easing to address problems.
Pressed on whether the economy would recover to pre-crisis levels of growth, the governor replied: "I would like to think that we can go back to the sort of economic growth rates we saw in the past.
"Those people who are struggling on low incomes would feel it rather a policy of despair to say that we can't achieve growth.
"I see no economic reason why we cannot, in the long run, go back to the sort of growth rates we had before.
"Once we come through this crisis we will able to get back to that sort of period again, but it will take some time."
Last month, Sir Mervyn predicted a "zig zag" of positive and negative growth this year.
However, he has said he believes the UK economy will avoid returning to recession.