BoE Inflation Report

Woke up this morning to radio reports saying that the Bank of England was set to predict rising inflation  and that would probably mean higher interest rates.

I watched some of the press conference after their quartely report had been released and it was certainly not as gloomy as had been feared. Although growth has been revised down and inflation revised up, the inflationary increase is due to one off things like VAT rather than underlying inflationary pressure in the economy. The bottom line is that Mervyn King still expects interest rates to remain unchanged for some time to come.