"It's clear that the global economy has deteriorated significantly over the past few months and there are significant downside risks to the UK's own prospects."
- Centre for Economics and Business Research
According to the fresh survey published by the London-based Centre for Economics and Business Research (CEBR), the Bank of England is most likely going to keep the monetary policy unchanged for a longer period of time than it is currently anticipated. While some scenarios suggest that the regulator may hike the Official Bank Rate in February-March of next year, the new report assumes the real timing of policy normalisation is now moving closer to May or even August 2016. New estimates were significantly influenced by the decision of the Federal Reserve not to raise rates in September. On top of that, many experts assume the Bank of England will be ready to move only after the Fed.
In addition to new forecasts produced for the BoE, the CEBR's survey included comments on economic growth in the UK. They estimate the average GDP advance of just 1.7% for the years 2017-2020, even though next year the economy is likely to expand by more than 2%. Centre's economists noted, however, that considerable downside risks remain in place. Among factors that may drag Britain's economic expansion lower, they mentioned Chinese slowdown and weak net exports, while overall activity should be predominantly driven by healthy domestic consumption.
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