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Bank of England Forecasts Zero Economic Growth

The UK has been given more bad news from the Bank of England (BoE), after zero growth was forecast for the remainder of 2012. This means that 5 years on from the beginning of the global economic crisis, the double-dip recession being experienced by the UK is showing no signs of recovery.

Earlier in 2012 there was hope after the BoE forecast economic growth of 0.8pc before the end of the year, but this was dashed after the second quarter of 2012 saw a decline of 0.7pc. The Bank has now revised the forecast and has predicted zero growth for the rest of 2012. And on top of this BoE added that it does not expect the UK economy to return to its pre-recession state until 2014 at the earliest.

Sir Mervyn King, governor of BoE, said: “It’s a saga that goes on, and on, and on. I don’t think anything we have seen in the last few weeks changes our outlook on the situation”.

On the subject of the new Funding for Lending scheme, launched by the Government in order to increase lending from banks, and help pull the UK out of recession, Mr King added: “It is possible that some banks raising funding through the scheme will take the opportunity to boost profits and capital rather than lowering lending rates”.

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