MPC predicts above-target inflation in 2013

Inflation will remain above the Bank of England’s target for the next year, the Monetary Policy Committee December meeting minutes revealed this morning.

Consumer price inflation defied expectations to remain at 2.7 per cent in November, official figures showed yesterday, due to a greater-than-expected contribution from university tuition fees and higher food prices.

“Inflation was likely to remain above the two per cent target for the next year or so, owing in part to the continuing impact of the rise in university tuition fees and higher domestic gas and electricity and other administered and regulated prices,” the minutes showed.

The committee agreed that the size of the current monetary stimulus – currently at £375bn – was appropriate.

“Most members agreed that developments on the month had done little to alter the balance of arguments between maintaining and increasing the size of the monetary stimulus,” the minutes showed.