UK recession deepens as Bank of England confirms zero growth forecast
The Bank of England has confirmed it is predicting zero percent economic growth for this year – demonstrating that five years on from the global economic crisis, the UK’s double-dip recession is deepening.
On Wednesday the Bank of England published their Inflation Report, which revised their anticipated 0.8% annual economic growth for May to zero.
The Bank went further, suggesting that the recovery of the economy to its pre-crisis peak will not happen before 2014.
The governor of the Bank, Sir Mervyn King, cited the Jubilee bank holiday and other temporary factors as causes for the zero percent growth forecast. Although he is more positive about coming years, his optimism does not extend to the eurozone crisis. The governor said it’s “a saga that goes on and on and on. I don’t think anything we’ve seen in the past three months changes our outlook about the situation.”
The Report predicted that the government’s new £80billion “Funding for Lending” scheme will do more for bank profits than the businesses and individuals it’s designed to help, stating: “It is possible that some banks raising funding through the Scheme will take the opportunity to boost profits and capital rather than lowering lending rates.”
Sir Mervyn King said: “The recovery and rebalancing of our economy will be a long, slow process. It is to our Olympic team that we should look for inspiration. They have shown us the importance of total commitment when trying to achieve a goal that may lie some years ahead.”