Bank of England MPC Minutes now published 4 Feb
- also there be may be concerns over Brexit
- rates more likely than not to rise
"The scale of recent commodity price falls means that CPI inflation is likely to remain below 1% until the end of the year. As the drags from energy and other imported goods unwind, however, domestic cost pressures are projected to build up sufficiently such that, conditioned on the path for Bank Rate implied by market interest rates, CPI inflation is likely to exceed the 2% target slightly at the two-year point and then rise further above it.
This central projection for inflation is modestly below that of three months ago for much of the forecast period but broadly similar by the end. The MPC judges the risks to the central projection to be skewed a little to the downside in the near term, reflecting the possibility of greater persistence of low inflation.
The mechanical return to higher rates of inflation as past falls in energy prices drop from the annual comparison, supported by the recent fall in the sterling exchange rate and some additional stimulus from lower market interest rates, should in time reverse this effect and support wage gains. The MPC judges that inflation expectations remain well anchored, though it remains watchful for signs that low inflation is having more persistent second-round effects on wages.
"All members agree that, given the likely persistence of the headwinds weighing on the economy, when Bank Rate does begin to rise, it is expected to do so more gradually and to a lower level than in recent cycles. This guidance is an expectation, not a promise. The actual path Bank Rate will follow over the next few years will depend on the economic circumstances".
Full Minutes from the BOE website
Inflation Report presser up next at 12.30 GMT. BOE has lowered growth forecasts and that's knocked GBP a tad lower along with vote now 9-0 from 8-1.
Wait for Carney now.
