Xinhua: British Central Bank Predicts No Growth for 2012

Britain's central bank, Bank of England, on Wednesday cut its growth prediction for the country to zero from the 0.8-percent forecast in May, in its latest quarterly inflation report.

"The big picture is that output has been flat for two years," said Governor Mervyn King in a news conference.

King dismissed the possibility of further cutting of the record low interest rate of 0.5 percent in the near term, which has been anticipated by some market participants as the Bank's next move to boost the economy.

"Another quarter point (cut) on bank rate is not going to be the difference between having a recovery and not having a recovery," King said.

He added that a rate cut would damage some financial institutions, such as building societies, and therefore would be "more counter-productive than beneficial."

The governor said the eurozone problem is far from being resolved, and that the future for Britain is unpredictable since the former would have a great impact on Britain.

Britain's recession deepened in the second quarter this year with a GDP contraction of 0.7 percent, following two consecutive quarters of 0.3 percent contraction. 

From: Xinhua
Time: 2012-08-08