Bank forecasts worst year for UK since 2009
The Bank of England expects growth this year to be the slowest since 2009 when the economy was in recession.
It is forecasting growth of 1.2% this year, down from its previous forecast of 1.7% made in November.
The Bank said it had seen further evidence that businesses were being cautious in the run-up to Brexit, including evidence from its own survey of firms.
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The Bank put the fall in growth down to a decline in business investment and housebuilding, as well as a halving of the growth rate in exports.
The UK was also being hit by slower-than-expected growth in the eurozone and China, the Bank said in its Quarterly Inflation Report.
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There has been an "intensification" of Brexit uncertainties, the Bank said.
Its survey of 208 firms showed that half had started putting plans in place for a no-deal Brexit.
It also noted a sharp fall in business investment at the end of last year.
"Uncertainty appears to have risen recently, and may have weighed on investment by more than had been expected in August," the Bank said.
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Many economists think that once the uncertainty over Brexit is lifted then the economy will accelerate and the Bank will have to raise interest rates to stop it overheating.
However, recent economic data has indicated weakness in the UK economy. Growth in the service sector, the biggest part of the economy, appeared to have stalled in January, according to closely-watched survey of purchasing managers.
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While the Bank cut its growth forecast it also noted the strength of the labour market, where the unemployment rate is currently 4%.
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Britain's unemployment rate has hit its lowest level in more than 40 years.
The Bank predicts that earnings will rise by more than 3% a year over the next three years.