Bank of England scales back growth forecast in ‘unusually uncertain’ environment

LONDON — The Bank of England has lowered its forecast for economic growth through 2012 because of the pressure on household incomes and government spending cuts.
Bank of England Governor Mervyn King said Wednesday that the outlook for growth and inflation over the medium term is “unusually uncertain.” The Bank lowered its expectations for gross domestic product in 2011 to around 1.7 percent, compared with 2 percent in the February report.
The bank expects consumer price inflation — now 4 percent — to remain above the official target of 2 percent per year through 2012.
Britain’s economy has not grown over the past two quarters. A rise of 0.5 percent in first-quarter GDP only made up for a half percent drop in the last quarter of 2010.
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