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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:There will be a mix of sunny spells and a few, mainly light, showers during the morning, mostly in the west. Cloudier with scattered showers into the afternoon. Maximum temperature 11 °C.Tonight:Scattered showers and clear spells continue through this evening, becoming dry with clear skies for a time overnight. Clouding over by morning. Minimum temperature 2 °C.
