Bank of England cuts UK growth forecasts

The Bank of England has cut its growth forecasts, with a UK interest rate rise not now likely until late 2012.

In a downbeat report, there appears to be no room for UK interest rates to increase in the foreseeable future, which is not good news for the Pound and those of you looking to transfer funds abroad.

Sterling has fallen heavily against the Euro and US Dollar in the last 24 hours, despite continuing Eurozone debt worries and the US Federal Reserve yesterday making a similar statement on US interest rates which are to be held near zero for the next 2 years.

Governor King also noted that the biggest current risk to the UK economy is the Eurozone crisis, as the UK is so exposed to European banks and bonds. Any further spreading of European debt problems are perhaps therefore unlikely to improve the sterling to Euro exchange rate.