BGN Entrepreneur

Bank of England drastically cut its forecast for UK’s economy in 2009, predicting a further shrink at an annual pace of as much as 4% during the summer, which will be more than twice as bad as its assessment last November. A deep recession is also expects to drag on for most of the year.
The Bank cut the interest rate by 0.5% point to an historic low of 1% this month. However, the impact of cuts on interest rate were blunted by the credit crunch as banks failed to pass on the full benefit to all customers.
Today, the Governor of the Bank of England gave a strong signal that under a strategy of quantitative easing, the Bank will start “printing money” as soon as next month. The Bank underlined its determination to keep inflation at the 2% target, raising expectations that the Bank’s rate-setting committee may be preparing to use its new powers of quantitative easing to help to boost UK’s economy.

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