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8/1/2019, 1:02 PM (Source: TeleTrader)
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BoE cuts GDP forecast for 2020, sees higher inflation

Import prices excluding fuel are expected to jump 0.75% per quarter from June through March of next year, the Bank of England said in the inflation report published on Thursday as it kept policy measures unchanged. The update marks a shift from the previous summary, when it projected a drop of almost 0.75% this year. The consumer price growth estimate was lowered by 0.1 percentage points to 1.7% for the current quarter but it was boosted by 0.2 points to 1.9% for the year through September 2019 and by 0.1 points to 2.2% for the year after that. Inflation was predicted to reach 2.4% in 2022 compared to the 2% target.

Policymakers revised annual economic growth lower by 0.2 points to 1% for the third quarter of this year and 0.3 points for the following twelve months to 1.4% while the forecast for 2021 was lifted to 2.4% from 2.1% and expansion is seen at 2.5% at the horizon.

The benchmark bank rate trajectory was flattened for next year and 2021 by 0.3 and 0.4 points, respectively, to 0.5%, and 0.1 points was added for the initial estimate for the third quarter of 2022. Unemployment projections were lifted slightly to 4% for 2020 and 3.7% for the year after that. BoE acknowledged "inconsistency" in growth forecasts with regard to lower interest rates.

Breaking the News / IT