THE BANK of England downgraded the UK’s growth prospects yesterday, with governor Mervyn King warning that the economy is still in the midst of a crisis.
GDP growth will come to around 1.5 per cent this year, the Bank estimates -- down from the 1.8 per cent forecast in its last inflation report.
In 2012 the Bank expects the UK’s economy to expand by around two per cent, a downgrade of half a per cent from its previous estimate.
King said: “2008 was not the end of the crisis – it was merely one stage. We are going through the next stage now... There are a number of [global] headwinds not least the public and private debt overhang, and these are becoming stronger by the day.”
The Bank’s inflation forecasts appear to show a modest downgrade in its expectations for price pressures in 2012.