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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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The Bank of England's Monetary Policy Committee (MPC) has today voted to reduce interest rates by 0.25% - to 3.5%. The MPC says that the "global economic recovery has remained hesitant", but that preconditions for recovery "remain in place".
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Northern Ireland WeatherToday:Gale, coastal severe gale, northwest winds ease from late afternoon. Scattered showers will fall as snow over the hills at first, becoming isolated from mid-afternoon. Maximum temperature 7 °C.Tonight:Showers, scattered in the evening, will clear by midnight leaving the night dry with clear spells. Cloud will spread east towards morning. Minimum temperature 2 °C.
