Minutes from the last Monetary Policy Committee meeting show The Bank of England has sharply downgraded its growth forecast for the rest of the year, cutting their rate to close to zero, after having expected much stronger growth as recently as August.
The Minutes, released last Wednesday, show that the MPC voted unanimously to increase its quantitative easing programme by £75 billion, although discussed the possibility of raising it to £100 billion.
In its last quarterly report in August, the Bank estimated a 0.4% quarter on quarter growth for the last 3 months of the year and an annual 2.1% compared to the last quarter of 2010.
Independent analysts are beginning to downgrade forecasts for 2011 to below 1%. After the Minutes were released, the LibDem Business Secretary, Vince Cable, refused to rule out the possibility that there could be a double-dip recession.
In an outspoken interview, he admitted the “brutal reality” was that Britain’s economy is deteriorating.
During the week independent think-tank, the Centre for Economic and Business research, (CEBR), revised down its growth forecast for next year to 0.7%, below the Office of Budget Responsibility’s forecast of 2.5% and also revised down its growth forecast for this year to 0.6% from a range of 1% to 1.5%.
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