Bank of England to cut growth forecasts by 1%

The Bank of England is likely to cut the UK's economic growth forecast by 1% for both and this year and 2011.

The Sunday Times says the Bank will also predict higher inflation over the next 18 months in its quarterly inflation report this week. Current Bank growth projections for 2010 and 2011 now stand at 3.4% and 3.6% respectively. Inflation will continue above the bank's target of 2% for most of next year, after remaining above this level in most months since 2006.