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11/08/2010
Bank Of England Forecast Hits Sterling
The Pound has weakened today after the Bank of England cut its forecasts for UK economic growth and long-term inflation in its quarterly Inflation Report.
Sterling fell below $1.57 against the dollar for the first time in August, from around $1.5750 immediately before the report was released.
In counterpoint, the Euro climbed to be worth just over 83 pence from around 82.9 pence.
The Governor of the Bank of England, Mervyn King also said inflation would stay higher for longer than previously forecast.
The Bank now expects the economy to grow by about 2.5% in 2011, down from its previous forecast of about 3.4% and added that a lack of bank lending would limit economic growth.
"It will take many years before bank balance sheets and fiscal positions return to anything like normal," said Mr King.
"In the meantime they will act as headwinds to the recovery."
Mr King also warned that the UK economy faced a difficult rebalancing "away from private and public consumption and towards net exports", and that this could also hit economic growth.
(BMcC/GK)
Sterling fell below $1.57 against the dollar for the first time in August, from around $1.5750 immediately before the report was released.
In counterpoint, the Euro climbed to be worth just over 83 pence from around 82.9 pence.
The Governor of the Bank of England, Mervyn King also said inflation would stay higher for longer than previously forecast.
The Bank now expects the economy to grow by about 2.5% in 2011, down from its previous forecast of about 3.4% and added that a lack of bank lending would limit economic growth.
"It will take many years before bank balance sheets and fiscal positions return to anything like normal," said Mr King.
"In the meantime they will act as headwinds to the recovery."
Mr King also warned that the UK economy faced a difficult rebalancing "away from private and public consumption and towards net exports", and that this could also hit economic growth.
(BMcC/GK)
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Northern Ireland WeatherToday:It will be cloudy again throughout the day. Mainly dry in the morning, but patchy drizzle in places, becoming more widespread and persistent in the afternoon. Freshening southwesterly winds. Maximum temperature 12 °C.Tonight:Cloudy with a spell of heavy rain pushing south through late evening and the early hours, followed by some clear spells. Minimum temperature 6 °C.
