The Bank of England has cut its growth forecasts for the next three years after a stronger pound and changing interest rate expectations took their toll on growth.
The U.K. central bank's forecasts for gross domestic product (GDP) growth in 2015 have been cut from 2.9 percent to 2.5 percent, while 2016 predictions were brought down from 2.9 percent to 2.6 percent.
The Bank warned about weakening productivity, as concerns about the quality of jobs being created in the U.K. persist. The U.K.'s unemployment rate fell to 5.5 percent -- its lowest level since mid-2008 -- in the first quarter, while worker's pay rose slightly more than expected, official figures released Wednesday showed.
Inflation should stay low for the rest of the year, with the Bank forecasting just a 0.6 percent rise this year after low energy prices.