UK will see 'sharp slowdown' in economy over two years
The UK is set to avoid recession thanks to economy-boosting measures, but will see "little growth" over the rest of 2016 and a sharp slowdown for the next two years, the Bank of England warned.
In its quarterly inflation report, the Bank predicted the economy to almost flat-line with growth at 0.1% in the third quarter, in what would mark a steep decline from the 0.6% growth seen between April and June this year.
It said the Brexit vote has seen its forecasts slashed by around 2.5% over the next three years, which is the steepest downgrade between two inflation reports since the Monetary Policy Committee was formed nearly 20 years ago.
Bank Governor Mark Carney stopped short of saying the UK would likely fall into recession were it not for its rate cut and emergency package. But he said growth would be anaemic even after monetary policy action.
The Bank kept its growth forecast at 2% for 2016, thanks only to a better than expected first half, but it sharply reduced the outlook to 0.8% in 2017 and 1.8% in 2018. It previously predicted growth of 2.3% in 2017 and 2018.