Released later this morning, the quarterly inflation report is likely to predict no growth for 2012, according to the Telegraph.
In its May report, it had predicted growth of 0.8%, with governor Mervyn King claiming the UK would be “unscathed” by the eurozone “storm”.
However, the Bank is now expected to also downgrade growth forecasts for 2013 to around 1.5%, down from more than 2% in May.
King is also likely say inflation will fall below the 2% target by the end of the year, from its current level of 2.4%, due to falling oil and commodity prices and a faltering economy.
After its most recent meeting, the Bank’s Monetary Policy Committee voted to keep interest rates at 0.5% and quantitative easing at £375bn.
The UK economy shrank by 0.7% in the second quarter of the year, a far worse contraction than economists had forecast, extending the longest double-dip recession since the 1950s.
