BoE lowers Britain's growth forecast for 2015, 2016

The Bank of England, British central bank, Wednesday cut its forecast on Britain's economic growth for 2015 from 2.9 percent to 2.5 percent, and for 2016 from 2.9 percent to 2.6 percent in its latest quarterly forecast report.

The weaker productivity growth is the main reason for BoE's forecast adjustment. The central bank also toned cautiously on Britain's low-inflation environment.

The BoE's Governor Mark Carney said during the press conference that deflation could emerge within this year, but the inflation was expected to pick up notably towards the end of the year.

"A temporary period of falling prices should not be mistaken for widespread and persistent deflation," he said.

Official figure showed that British consumer prices index (CPI) fell to zero in the year to March 2015, the second month that the country did not see inflation.

Carney said that four factors, including the sharp drop in energy prices, decrease in food prices, British pound's appreciation as well as the subdued growth in domestic costs, could be attributed to the no-inflation situation.

He stressed that the Monetary Policy Committee would stick to its strategy that set policy to support the rise in domestic costs needed to return inflation to target within two years.

The central bank's inflation target is two percent.

On the same day, data released by the Office for National Statistics showed that British unemployment rate fell to 5.5 percent in the three-month to March 2015, lower than the 5.6 percent of the three-month to February 2015, recording the lowest level since mid 2008. Endit