Bank of England cuts 2011 growth forecast

The Bank of England on Wednesday cut its 2011 economic growth forecast to about 1.4 percent, compared with the previous prediction of 1.8 percent, citing risks from the eurozone debt crisis. "The outlook for output growth remains highly uncertain," it said in a quarterly report which added that there was a "good chance" of 12-month consumer price inflation hitting 5.0 percent, way above target, by the end of the year. "The greatest risks to the prospects for global demand come from the euro area and the substantial challenges faced by several member countries as they seek to ensure the sustainability of their fiscal positions and to preserve the stability of their banking systems. "Were they to crystallise, the risks emanating from the euro area have the potential to have a significant impact on the UK economy."