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Inflation to ‘remain high’
The Bank of England has said that inflation will stay high next year and the economy is likely to remain weak.
The Bank's quarterly inflation outlook blamed a combination of the rising price of raw materials, higher energy bills and the increase in VAT scheduled for January next year.
"The new Inflation Report, and subsequent comments by the Bank Governor, suggests that the MPC is expecting inflation over the next two years to be higher than they predicted in August, and growth to be slightly higher than the historical average," said David Kern, Chief Economist at the British Chambers of Commerce.
"However, due to the risks facing the economy, we believe it is important for the MPC to keep the possibility of adding to the QE programme under active consideration, while keeping interest rates at very low levels for an extended period."
The Bank gave no clear indication over the direction of interest rates - still at the historic low of 0.5% - and did not state whether there would be more money injected into the economy through its programme of Quantitative Easing.
Post Date: November 10th, 2010
The Bank's quarterly inflation outlook blamed a combination of the rising price of raw materials, higher energy bills and the increase in VAT scheduled for January next year.
"The new Inflation Report, and subsequent comments by the Bank Governor, suggests that the MPC is expecting inflation over the next two years to be higher than they predicted in August, and growth to be slightly higher than the historical average," said David Kern, Chief Economist at the British Chambers of Commerce.
"However, due to the risks facing the economy, we believe it is important for the MPC to keep the possibility of adding to the QE programme under active consideration, while keeping interest rates at very low levels for an extended period."
The Bank gave no clear indication over the direction of interest rates - still at the historic low of 0.5% - and did not state whether there would be more money injected into the economy through its programme of Quantitative Easing.
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Post Date: November 10th, 2010
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