The Bank of England forecast on Wednesday that the British economy would grow less than expected this year amid concerns over the eurozone debt crisis, markets turmoil and government austerity measures.
The BoE predicted that gross domestic product would grow by about 1.4 per cent this year, compared with a previous forecast of 1.8-per cent in May.
The central bank also expects the economy to expand 2.0-3.0 per cent in 2012 but growth would remain sluggish in the near term, reflecting the continued squeeze on household incomes from high inflation.
'The outlook for output growth remains highly uncertain,' the Bank of England said in a quarterly report which detailed its latest economic forecasts.
'The greatest risks to the prospects for global demand come from the euro area and the substantial challenges faced by several member countries as they seek to ensure the sustainability of their fiscal positions and to preserve the stability of their banking systems.
'Were they to crystallise, the risks emanating from the euro area have the potential to have a significant impact on the UK economy.'
However, the BoE's latest calculations did not take into account recent stock market turmoil as the eurozone crisis and the weak US economy sparks fears of another sharp global economic downturn.
Source : New Age
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