The Bank of England (BoE) released its Inflation Letter. The BoE lowered its economic growth forecasts. The forecast for gross domestic product (GDP) growth in 2015 was cut to 2.4%, down from 2.9% three months ago. The GDP growth forecasts for 2016 and 2017 were lowered to 2.6% and 2.4% respectively.

The BoE expects inflation to decline below zero in the coming months and to return to the BoE's 2% target within two years.

The central bank also downgraded its expectations for wage growth in 2015 to 2.5% from 3.5%.

Wage growth is a key determination in the timing of first interest rate hike by the BoE.

Britain's central bank is worried about productivity growth in the U.K.