Bank of England warns of slower than expected UK economic growth
Disclaimer: THIS MATERIAL IS NOT INVESTMENT RESEARCH AS DEFINED BY THE FINANCIAL SERVICES AUTHORITY
Today the Bank of England confirmed it is now even more pessimistic about the outlook for UK economic growth and believes it is likely inflation will remain above the 2% target for longer than initially expected. Lending to businesses remains subdued and the recovery is likely to be relatively slow but steady.
Three months ago growth forecasts for next year were estimated at 3.4%, this has now been reduced to 2.5%. This morning Sterling has been sold to its lowest level in a week down to 1.5668 against the US dollar.
The bank also confirmed it would be many years before bank balance sheets and fiscal positions returned to anything like normal. The bank’s comments signal that the UK economy may need more emergency stimulus and interest rates will remain at their lows for longer than expected.
Wednesday 11 August 2010, 02:29pm
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