The Bank of England lowers its growth forecast for the British economy and signals a rise in interest rates to tame inflation – but Governor Mervyn King says no decision has been made on timing.
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In its latest quarterly report published today, the Bank said output was likely to be weaker than expected in 2011, but a double dip recession was not expected.
Inflation is likely to continue rising this year to around 5 per cent, before falling close to the Government’s 2 per cent target in 2012 – but only if interest rates rise in the second quarter of 2011.
