Britain reduced its economic growth forecast by way of the Bank of England. The bank stated that this move was influenced by the economic conditions of both the United States and Europe. In the United States, economic growth is still very uncertain, and the same can be said about Europe, which is facing debt problems.

Another factor which led Britain to reduce its growth forecast is the fact that its banks are too slow to increase their lending. Last May, it predicted that the maximum growth it will have on an annual basis is 3.6 percent, but now, it was changed to just 3 percent.

Another prediction by the bank of England is that its inflation will continue to be higher than the 2 percent goal, and this will remain in that value for as long as the end of next year. This is longer than what was originally predicted. Mervyn King, who is the governor of the Bank of England, stated that there are obvious risks involved.

The bank needs to support the economy, and it may have to expand the stimulus package in or der to do so. He stated that the sentiments of both consumers and businesses remain very soft, and a lot of analysts feel that the economy is very fragile.