The Governor of the Bank of England warned that any recovery would be slow and that the crisis in the eurozone had cast a "black cloud of uncertainty" over businesses around the world.
"I think it's this black cloud of uncertainty which is hanging over British business as it is hanging over American business."
The European Central Bank's actions to support the currency had bought some breathing space, Sir Mervyn said in an interview with Channel 4 news.
"Now is the time that they have to decide exactly what kind of monetary union they want."
More top news
The former Chelsea manager has agreed a deal that could be extended until 2020 as Louis van Gaal's replacement at Old Trafford.
Hundreds of passengers escaped down emergency slides as smoke on a Korean Air Lines plane forced a mass evacuation before take-off.
The Prime Minister has insisted that Britain support the new Libyan government and help to stabilise the region.