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Bank of England cuts UK growth forecast.

Summary: Bank of England cuts UK growth prediction and warns of 'storm' from Europe.

The Bank of England has warned it will be at least 2014 before the UK economy returns to the levels it was at before the financial crisis.

It also cut its growth forecast for this year to 0.8 per cent from 1.2 per cent.

The Bank predicted the rate of inflation would not fall as quickly as previously thought, staying above the Government's two per cent target "for the next year or so".

Governor Sir Mervyn King said both weak growth and high inflation have been the unavoidable consequences of the financial crisis, that have been "painful for everyone in our society".

He also described the eurozone as the greatest threat to the UK's recovery and warned of the "risk of a storm heading our way from the continent".

However, it is not all bad news, Sir Mervyn said he believed the bigger picture was one of gradual recovery in growth.

Independent Television News Limited 2011. All rights reserved.

Independent Television News Limited 2012. All rights reserved.

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Publication:Independent Television News Limited (ITN)
Date:May 16, 2012
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