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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:A showery start with outbreaks most frequent north of Lough Neagh and through the morning, before dwindling during the afternoon as the northwest breezes ease and brighter spells of weak sunshine prosper. Maximum temperature 8 °C.Tonight:A dry night, save for a few light showers around the coasts, with prolonged clear spells and light winds bringing a frosty dawn for many in central and southern parts. Minimum temperature -3 °C.
