New forecasts released by Cebr – the Centre for Economics and Business Research – suggest that the Bank of England (BoE) won’t raise interest rates until the middle of next year. Previously, the leading forecasting house expected the BoE to raise rates in February.

Cebr expects the UK economy to grow by 2.5% this year. However, growth is expected to slow to 2.0% in 2016 and then average just 1.7% over the years 2017-2020. In contrast, the Office for Budget Responsibility expects growth to remain above 2% during this period.

However, Cebr says that there are significant downside risks to these forecasts. The global economic slowdown, driven by substantial weakness in emerging markets (most notably China), is holding back export prospects and curbing business investment. If the world economy continues to falter, then these weights on growth will become even bigger.

The BoE is expected to keep rates on hold for longer in response to this deteriorating global backdrop. Inflation on the consumer price index (CPI) measure is expected to stand below 2% until 2017, giving the Bank room for manoeuvre to keep rates on hold.