BANK of England policymaker David Miles has said he expects inflation to be close to two per cent by the end of this year, substantially below what the central bank forecast in February.
“We are now back to slightly under three per cent and I think it will hover around this level for a good part of this year – but it’s more likely than not that as we go into next year, inflation will be quite close to two per cent," he said in an interview with the Belfast Telegraph.
Inflation is currently 2.8 per cent and the central bank forecast in February that it would peak above three per cent later this year before easing slightly to just under three per cent in early 2014. It is not forecast to fall below its two per cent target until early 2016.
The central bank will publish new inflation forecasts in May. Miles is among the minority of policymakers who back more quantitative easing asset purchases.
Miles also said that he expected the squeeze on Britons’ disposable incomes over the past four years to ease as inflation fell.
City A.M. Reporter