By Marcus Leach

Despite encouraging signs from the latest industrial output data, it seems that the effects of the recession are intensifying, as the the Bank Of England cuts the UK growth forecast to almost zero from the 0.8% predicted in May.

The Bank's quarterly inflation report indicates no growth for 2012 compared with 2% predicted a year ago.

True to Governor Sir Mervyn King's words at the time of the last report, Britain has not escaped the eurozone storm unscathed.

"The big picture is that output's been flat for two years," he told a news conference.

Given the state of the economy there were calls for a further cut to the already record low interest rate, which currently sits at 0.5%.

"Another quarter point [cut] on bank rate is not going to be the difference between having a recovery and not having a recovery," Sir Mervyn added.

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