The Bank of England today justified its quarter point rate cut earlier this month and left the door open for more to come, saying that the balance of risks for both growth and inflation are "weighted slightly the downside." In its previous round of forecasts, the central bank predicted that the risks to inflation were "broadly balanced" while the risks to growth were to the downside. In its latest quarterly projections for growth and inflation released today, the BoE's rate-setting Monetary Policy Committee said it expects CPI inflation to rise above the 2 pct target in the near term due to the "transient" impact of oil prices before easing back. However, as economic growth recovers again further out, inflation is expected to bounce back above the 2 pct target. Overall, the outlook for prices is a little higher in the near term and also somewhat higher in 2007, the central bank said. The central bank also said it expects GDP growth to be "a little" below trend -- seen as around 2.5 pct -- in the near term, but picking up thereafter. GDP growth will be "subdued in the near term reflecting the continued sluggishness of domestic demand," it said. However, growth is then seen picking up as recent asset price movements boost consumption, investment and net trade. The BoE said there have been "substantial" movements in asset prices since the May inflation report, noting particularly the rally in equities, the fall in sterling's exchange rate and the fall in interest rate expectations. The bank also pointed to the recent stabilisation of the housing market. The profile for growth is weaker in the near term compared with the previous round of inflation forecasts but stronger further out, the BoE said. The BoE also identified risks to its forecasts, including the outlook for consumer spending, the causes for the recent pick up in inflation and the prospects for oil prices. Тhe nine members of the rate setting panel held a range of views but felt overall that the balance of risks to GDP growth is slightly lower in the near term. For inflation, they also believe the risks are to the downside further out. A more detailed analysis of the projections showed that the central bank predicted moderate growth for consumer spending in the near term as the steep falls seen so far this year have been "surprising" and may well be revised. But there are considerable uncertainties surrounding this forecast, it acknowledged. The rate-setting panel delivered the UK's first rate cut in two years last week, taking the base rate to 4.50 pct from 4.75 pct. The benchmark rate had stood still at 4.75 pct for one whole year.