Mervyn King maps out road to lower inflation

Mervyn King appeared before the Treasury Select Committee this morning to answer questions about the Bank's quantitative easing programme and the recent decision to boost the asset purchase facility by £75bn. MPs are concerned the latest round of QE will drive inflation up further from its current level, 5.2%, and King was asked to provide more details on his recent predictions that it will begin falling back to its 2% target level next year. He said: "The first thing that will happen as we go into the New Year is the effect of the increase in VAT last January will disappear from the ...