BoE cuts UK growth outlook, rate rise far off

The Bank of England (BoE) cuts its growth forecasts and said inflation would fall rapidly in 2012, indicating monetary policy will need to remain ultra-loose this year and next as the global economy struggles to stabilise.In its quarterly Inflation Report, however, the central bank gave little indication it was about to further loosen policy through another round of quantitative easing, money-printing by another name.  “Since we last met, the mood in markets has taken a sharp turn for the worse,” BoE Governor Mervyn King told reporters. “In the (monetary policy) committee’s view the weakness in underlying activity is likely to be somewhat more persistent than previously expected.  “There are a number of headwinds to world and domestic growth over the forecast period, not least the public and private debt overhang, and these headwinds are becoming stronger by the day.”The US Federal Reserve on Tuesday took the unprecedented step of saying it was likely to keep interest rates near zero for at least two more years, and said it would consider further steps to help growth, while the European Central Bank overcame some internal opposition to begin buying the bonds of Italy and Spain this week. From / Gulf Today