I lost the toss with Gerry on this, so he’ll be reporting on Big Merv
- Euro policy failure will likely trigger a “disorderly outcome” and have severe UK implications
- Inflation forecast “somewhat higher” than in Nov, Sees 1.8% in 2 years.
- UK GDP growth likely to remain weak in the near term, around 2% in Q4 2012 and 3% in Q4 2013
- CPI risks at end of forecast period “broadly balanced”
- Forecasts assume no rate hike before Q2 2014, unchanged QE
- “Difficult to gauge” underlying inflation pressure
- Recovery to be driven by household incomes, but will be weakened by exports, tight credit and austerity
- Options for further stimulus remain on the table
