Press Release Summary: The Bank of England might be forced to cut on interest rates in the coming year due to the gradually slowing down economy which might ultimately land the economy into recession.
Press Release Body: London (Longdogfinance) July 24, 2008: Even in the face of rising inflation rate, the top bank might be forced to cut on interest rates. As per the study conducted by 70 economists, the economy is expected to grow at only 1.5 percent, a figure significantly lower than the earlier forecasts of 1.7 percent.
Similarly, the forecasts for the next year were brought down from 1.5 percent to just 1 percent. It has been a very pungent climb-down from the impressive 3.0 percent growth rate in 2007. With the median forecast hinting a 40 percent risk of recession in the next year-which is 10 percent higher than the forecasts in the June poll-things look really gloomy for the overall economy.
\"The UK economy is clearly heading for at least a sharp slowdown with about a one in three chance that this could turn into an outright recession,\" head of macroeconomics at Pricewaterhouse Coopers, John Hawksworth, told at a meeting.
In the UK economy, a recession is supposed to have taken place if the gross domestic product (GDP) falls for two consecutive quarters. All this started with the American mortgage crisis which created world wide credit crunch. Under these negative consequences, the British housing market is suffering due to the loss of common man\'s trust in the housing rates.
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