Bank of England cuts economic growth forecast
The Bank of England has today reined in its economic growth outlook for the UK with a suggestion that it may take up to two years for inflation to fall back below the 2% level and UK economic growth is unlikely to peak at 3.6% in the short to medium term but could peak at 3%. While these reductions in growth forecast do not go as far as many analysts had expected, they do show that the UK economic situation has down turned over the last few months and is under significant pressure. So what else can we expect from the Bank of England?
While now may not be the time to introduce a variety of new liquidity programs there is a feeling that the Bank of England is readying the market for changes in the short to medium term. Slowly but surely the comments associated with Mervyn King, the governor of the Bank of England, are becoming more and more downbeat and more depressing. The Bank of England has more data to hand regarding the UK economy and is more than aware of the downturn in confidence. However, quite what the Bank of England and the government can do to repair this damage remains to be seen.
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