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BoE warns of ‘slow’ economic recovery
The UK will face a slow recovery from recession as the financial crisis has a continued impact on public and private spending, according to the Bank of England (BoE).
In its latest inflation report, the BoE also warned there were significant risks to the inflation outlook.
The Bank said the financial crisis will continue to take its toll on economic recovery even though there have been recent signs of recovery in industrial output and equity markets.
Credit will remain restrictive as banks repair their balance sheets, while high levels of public and private debt will curtail spending.
However, the BoE said GDP growth could be anywhere between -1% and 5.5% by the end of 2012.
Steps to pump new money into the economy through quantitative easing have shown early signs of success but uncertainity has remained, the report said.
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The inflation report will be likely to be a blow to the Treasury, which predicted strong economic growth will return in 2010.