The Bank of England is going to lower its forecast of the economic growth in the UK but at the same time it would raise its expectation for the inflation rate while publishing the quarterly inflation report in the upcoming days.

According to the budget of June, the VAT would be increased to 20% in next January due the increased cost of living. In the month of May the Bank of England had estimated a growth of 3.5% for the year 2011 and made a forecast that the inflation would be below the target of 2% for the next year.

But according to the Office for Budget Responsibility (OBR) the growth rate for the next year would be 2.6%.

As per the market experts, any revision to lower the growth forecast could lead the UK in to double dip recession. This announcement of revising the forecast came after the US Federal Reserve has declared that the economic growth had slowed down in the recent months.

The UK inflation rate stood at 3.2% in the June on the Consumer Price Index which was well above the pre estimated target of the bank.