Bank of England: Britain's economic growth to slow 'sharply'

By JERUSALEM POST STAFF
Britain's economic growth could slow sharply in the near term amid an ongoing credit squeeze and increasing inflation, Bank of England Governor Mervyn King said Tuesday. Fears that the British economy could cool significantly have grown amid days of market turmoil sparked by fears that the collapse of the US subprime mortgage market over the summer could be dragging the country into a recession. Britain has already downgraded its 2008 GDP growth forecast to between 2 percent and 2.5 percent, well below the 3.1 percent growth in 2007 and its pre-credit crisis estimate for 2008 of between 2.5 percent to 3.0 percent. "To put it bluntly this year we are probably facing a period of above target inflation and a marked slowing in growth," King told a group of business leaders in Bristol, western England.