Zero-growth forecast for economy

The economy will grind to a halt this year as the threat from the eurozone, tough austerity measures and tight lending conditions drag on the economy, the Bank of England has warned.

In its quarterly inflation report, the Bank slashed its growth forecast for 2012 to around zero from 0.8% in its May report, while the economy is now expected to grow by around 1.9% in 2013, compared to 2.4% in its last estimate.