Inflation 'likely to have exceeded 3%' - MPC

Today's announcement means BoE governor Mervyn King is likely to be forced to write again to the Chancellor to explain why inflation is still above the 2% target. King attributed the upscale in forecast to the restoration of the VAT rate to 17.5% at the start of the year, higher petrol prices, and the continued depreciation of sterling. He expects inflation to remain "significantly above the 2% target in the near term", though added "the extent to which CPI inflation will deviate from the 2% target in the medium term is highly uncertain". Today's forecast is based on maintaing the ...