Bank of England cuts growth forecasts, keeps rates low

LONDON — The Bank of England cut its growth forecast for Britain on Thursday, saying it expects a “sluggish” economy as household incomes are squeezed by a rise in inflation that followed the Brexit vote.

The central bank cut its annual growth estimate for 2017 to 1.7 per cent from 1.9 per cent previously, and for 2018 to 1.6 per cent from 1.7 per cent.

The bank’s Monetary Policy Committee also voted 6-2 to keep rates at a record low 0.25 per cent amid uncertainty about Britain’s economic prospects as it prepares to leave the European Union.

The bank said in a statement Thursday that “GDP growth remains sluggish in the near term as the squeeze on households’ real incomes continues to weigh on consumption.”