How will growth forecast affect freelancers?

On Wednesday, the Bank downgraded its economic growth forecast for 2011, from 3.4% to 2.5%. The report expects that inflation will remain above 2% for the majority of next year, but by 2012 it should ease. However, the governor of the Bank of England, Mervyn King, said it will be many years before things return to normal.

The Monetary Policy Committee could come under pressure to raise interest rates if inflation stays above 3%, according to experts.

Chris Williamson from Markit said that the Bank of England seems remarkably relaxed about the UK's economic growth prospects compared to the Federal Reserve in the US and the Bank of Japan, both of which appear to be getting more concerned about the future.

The ONS also released data on Wednesday showing that unemployment fell in Q2. 2.46 million Britons are now unemployed, a drop of 49,000 on Q1 and the highest decrease since 2007.

The number of people in part-time employment last quarter jumped by 115,000 to 7.84 million, whilst the number of people in full-time employment rose by 68,000.

Overall, the UK unemployment rate is 7.8%, but there are variations amongst the countries. Wales has the highest rate of unemployment at 9%, followed by Scotland at 8.4%. Northern Ireland has the lowest rate, 6.6% and in England unemployment is 7.7%.

The figures were better than expected but the good news was overshadowed by the Bank of England's statement about future economic growth prospects.

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