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Bank of England set to downgrade growth and inflation forecasts

Bank of England BoE Bank 480

The Bank of England is set to downgrade its growth and inflation forecasts as the eurozone crisis and slowing domestic demand continue to hit the UK economy.

The BoE is  expected to reveal in its August inflation report on Wednesday that the UK will have almost no growth in 2012, a marked fall from the 0.7 per cent forecast made in its May forecast.

The forecast, which will be presented by Governor Sir Mervyn King, will also downgrade growth to 1.5 per cent in 2013, down from the 2.1 per cent forecast in May.

According to The Telegraph, King is also likely to say that falling oil and commodity prices and a slowing economy will pull inflation down faster than forecast.

The Bank is expected to say annual inflation will fall below the 2 per cent target by the end of the year, from its current level of 2.4 per cent..

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