Bank of England policymakers expect inflation to fall below 1% over the next six months, according to the latest quarterly Inflation Report.
Governor Mark Carney said it is "likely" he will have to write an open letter to Chancellor George Osborne on account of inflation falling below this level in next six months. It follows UK CPI inflation falling to five-year low of 1.2% in September. Acknowledging the near-term outlook for inflation is "materially lower" than expected in the previous report in August, Carney predicted a return to the 2% target by the very end of the forecast period. Falling commodity prices, the depreciation of sterling and the weakness of the UK's main trading partners have all affected inflation...
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