Slightly up from August.

  • Wider than usual range of views among MPC over CPI and GDP, ready to act in either direction
  • BOE forecasts show CPI below target in 2 years assuming constant policy
  • CPI seen picking up further near=term, staying above 2% through 2011, higher than August forecast
  • Forecasts show GDP growth at just over 3% in 2 years, after slower growth during 2011
  • Timing and extent of CPI fall uncertain, roughly equal chance CPI above or below target in 2 years
  • Govt spending review contained little news for macroeconomic outlook
  • BOE forecasts based on market rates at 0.6% Q3 2011, 0.7% Q4 2011, 1.2% Q4 2012

Gilts have sold off in wake of BOE projections, sterling stronger.