Lombard St quotes 3% inflation level

Underlying inflation could exceed 3% by the end of 2002, according to Lombard Street Research's monthly economic review. The economic think-tank's forecast contrasts to the majority view, including that of the Bank of England, which has inflation remaining below 2.5% for the next two years. Martin McMahon, co-author of the report and an economist at Lombard Street Research, said there is a significant risk of a steep fall in sterling that could, in turn, lead to inflationary pressure. McMahon also pointed to a number of domestically generated factors, further increasing the pressure on...