Economic growth 'to be weaker than expected'

Economic growth could be ’rather weaker’ than the Bank of England has forecast, one economist has warned.

Jonathan Loynes of Capital Economics said that the Bank - which issued its Inflation Report last week - is being overly optimistic with its outlook, despite the fact that it has revised its expectations for 2010.

’I don’t think the economy will recover as quickly as they are suggesting,’ he remarked, adding that the ’large amount of slack in the economy’ will keep inflation low over the medium-term.

However, he agreed with the Bank’s general sentiment that the current rise in inflation - which is expected to increase from 2.9 per cent to at least three per cent in the coming months - is a temporary anomaly.

In its report, the Bank also forecast that gross domestic product will climb to 3.2 per cent next year, lower than its previous prediction of four per cent.ADNFCR-2318-ID-19615562-ADNFCR