London - AFP
The Bank of England on Wednesday slashed its forecast for growth this year in recession-affected Britain to close to zero percent, saying the greatest threat to recovery came from the eurozone crisis. Britain\'s gross domestic product (GDP) was predicted to be almost flat in 2012, down from the central bank\'s previous forecast of just below 1.0 percent, the BoE said in a quarterly report. \"The outlook for UK growth remains unusually uncertain,\" the central bank said in the report. \"The greatest threat to the recovery stems from the risk that an effective policy response is not implemented sufficiently promptly in the euro area to ensure that the adjustments in the level of debt and competitiveness required by some member countries occur in an orderly manner. \"Even if an effective set of policies is implemented, the scale of the necessary adjustments points to a sustained period of sluggish euro-area growth and heightened uncertainty,\" it added. Britain is not a member of the eurozone but the bloc is its major trade partner. The BoE added that fiscal consolidation and tight credit conditions in Britain were also \"likely to continue to weigh on demand.\" Britain escaped a deep downturn in late 2009 but fell back into recession at the end of 2011. Latest official data showed GDP slumped 0.7 percent between April and June from the first three months of this year. The Bank of England last week voted to keep its main interest rate at a record low 0.50 percent and maintain its level of cash stimulus at £375 billion ($584 billion, 476 billion euros) despite a deepening recession.