U.K. Growth Forecast Cut on Budget Curbs, Ernst & Young Says

Ernst & Young LLP’s Item Club cut its U.K. economic growth forecasts for the next three years and predicted the Bank of England probably won’t raise interest rates until 2014 because of the government’s budget squeeze.

Gross domestic product will rise 2.2 percent next year, compared with a prediction in April for 2.7 percent expansion, the research group, which uses the same forecasting model as the U.K. Treasury, said today according to an e-mailed statement. The economic revival will be “slow” and “patchy” as GDP climbs 1 percent this year, the group said.