Central bankers on both sides of pond turn wary

The central banks of America and Britain have turned cautious on economic growth forecasts.

The Bank of England last week predicted that Britain’s GDP is likely to grow less than estimated in the face of fiscal consolidation and tight credit.

Its forecast suggests a central projection for GDP growth as an annual rate of about 3% over the next three years. This assumes the bank rate follows market rates and the stock of purchased assets in its quantitative easing programme remains at £200 ­billion. (article continues below)

Meanwhile, the Federal Reserve announced it will buy American treasuries with the proceeds from its mortgage investments in an attempt to stave off a double-dip recession.

American central bankers followed Britain in downgrading the growth ­outlook.