One of the world’s most powerful financial traders warned yesterday that the world is enduring its “worst financial crisis” since the Great Depression and that Britain is heading for a recession.

In comments that will heighten families’ fears about their finances, George Soros said the worst of the credit crisis could be yet to come, with the world economy enduring a series of major aftershocks.

The billionaire investor also predicted that Britain is facing a lengthy housing slump, with homeowners seeing property values plunge.

Mr. Soros said, “Financial institutions have been severely damaged and we are currently in a situation that will probably, I think almost inevitably, result in a recession, certainly in the United States and most likely in England also.”

The warning, delivered on BBC Radio 4’s “Today” show, is significant because Mr. Soros, a successful hedge fund manager, made an estimated $2 billion in 1992 by betting that Britain would be forced to withdraw from the Exchange Rate Mechanism.

Mr. Soros said that while the “acute phase” of the crisis in financial markets has now passed, the more painful economic repercussions are yet to hit.

He said: “You are going to have a few years of very different conditions than the ones you’ve been used to over the last 25 years. We’ve had a pretty serious crunch but the acute phase is behind us and now we’ve yet to feel the effects. In the case of the U.K. we’ve had a housing bubble that in terms of price increases has been greater than in the United States.

“That’s also now going to be corrected — it is taking longer than in the States because you haven’t had over-building like in America.” House prices have tumbled sharply since the start of the year, with the government now acknowledging that prices are likely to fall by a tenth or perhaps more this year alone.

The falls have led to fears that many families will face negative equity, where their mortgage becomes more expensive than the value of their home.

In a further blow, the Bank of England last week indicated that in order to keep runaway inflation under control it may not be able to cut interest rates again this year.

The credit crisis has left many families facing a serious mortgage “shock” this year, as they renew their fixed rate deals and are forced on to significantly more expensive plans. Many households with poor credit records are struggling to secure a new deal at all, instead being forced on to an expensive standard variable rate.

Mr. Soros said this meant the prospects for the economy were even gloomier.

He claims in his forthcoming book that the financial crisis is the worst since the Great Depression in the 1930s, as it follows a major debt boom that has lasted a quarter of a century.