The Bank of England lowered growth estimate for the U.K. as fiscal consolidation and Eurozone debt crisis weigh on demand. In its quarterly Inflation Report, the BoE said economic growth is likely to be around 2 percent in two years, down from the 2.6 percent expansion estimated in May. "The impact of the euro-area debt crisis, together with the fiscal consolidation and tight credit conditions at home, is likely to continue to weigh on demand," it said. The bank said the outlook for UK growth remains unusually uncertain. The UK economy is navigating tough waters, Governor Mervyn King said. The BoE said the near-term outlook for inflation is lower than three months ago. This reflects falls in energy prices and some broader-based weakness in price pressures. Inflation is forecast to fall further throughout the year. According to BoE, the risks to inflation around the target are judged to be broadly balanced by the end of the forecast period. Inflation is seen near 1.7 percent in two years time.