LONDON (AFP) — The Bank of England would have to embark on a period of monetary easing to keep the annual inflation rate at the government's set target of 2.0 percent, the central bank said on Wednesday.
In its latest quarterly inflation forecast, the BoE said inflation would be at the central bank's 2.0-percent target in two years only if interest rates fell by 0.5 percent.
"November's BoE Inflation Report gives a clear signal that a series of interest rate cuts lies ahead," Capital Economics analyst Vicky Redwood said.
Britain's 12-month inflation rate increased to 2.1 percent in October from 1.8 percent in September on the back of soaring road fuel prices, official data showed on Tuesday.
It meant that the annual inflation rate was above the Bank of England's 2.0-percent target for the first time since June, according to the data from the Office for National Statistics.
The BoE had last week decided to keep its key interest rate at 5.75 percent for a fourth month running, as expected, as policymakers sat tight amid rising concerns over the global credit squeeze.
Interest rates were increased on five occasions between August 2006 and July 2007, each time by a quarter-point, to tackle high inflation.
As a result, the country's consumer price index fell dramatically to stand at an annual rate of 1.8 percent in September, after spiking to a decade-high 3.1 percent in March.
Subscribe to:
Post Comments (Atom)
.jpg)
No comments:
Post a Comment