UK 2011 growth forecast cut to 0.9%
Updated: 2011-10-17 10:04
LONDON - Britain's economy has stalled and will grow less than expected this year, despite the Bank of England's latest injection of 75 billion pounds ($118 billion) to try to stimulate a faltering recovery, forecasters said on Monday.
The Ernst & Young ITEM Club, which bases its quarterly report on finance ministry models, downgraded its 2011 GDP forecasts to 0.9 percent from the 1.4 percent it predicted three months ago.
Growth forecasts for 2012 were cut to 1.5 percent from 2.2 percent and unemployment will keep rising until it peaks at 2.7 million people in Spring 2013, the report said.
The central bank's second round of asset purchases is unlikely to kick start the economy in the face of worries about the euro zone debt crisis and uncertain global demand, according to the ITEM Club's autumn report.
"It's worse than we thought," said Peter Spencer, chief economic advisor to the ITEM Club, sponsored by accounting firm Ernst & Young. "The bright spots in our forecast three months ago -- business investment and exports -- have dimmed to a flicker as uncertainty around Greece and the stability of the euro zone increases."