Bank of England cuts growth forecast - Economy - News - Moneyfacts

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Bank of England cuts growth forecast

Bank of England cuts growth forecast

Category: Economy

Updated: 14/12/2012
First Published: 08/08/2012

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This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The Bank of England has slashed the UK 's growth forecast to zero, as the economy slips further into recession.

The forecast is down from 0.8% originally predicted in May, reflecting the dire state of the UK economy and dashing any hopes of a recovery.

The cut has also re-ignited speculation that base rate could reduce to either 0.25% or even zero over forthcoming weeks, although the Governor of the Bank of England, Sir Mervyn King, has played down such rumours.

Speaking in London, Sir Mervyn said: "The big picture is that output's been flat for two years. It's a saga that goes on, and on, and on. The idea that we have come to the end of it is unrealistic. There's still a long way to go.

"Another quarter point cut on bank rate is not going to be the difference between having a recovery and not having a recovery."

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