The Bank of England has released its growth forecasts for the coming year, but the outlook isn’t as rosy as they say, according to CEBR.
The Bank of England’s forecast for UK growth has been raised and it expects inflation will exceed its target of 2% in 2010.
It’s predicted that the VAT cut reverse will cause a brief surge in inflation, before it falls back to around 1% in early 2011. Inflation is expected to rise again to the target rate in 2012 on the assumption of the market path for interest rates and £200bn quantitative easing.
A strong economic bounce back is expected is expected from early 2010 – 2011 where the bank predicts GDP growth of over 4%.
“We think they are far too optimistic about 2010 growth”, said a spokesperson for the Cen...