-Mark Carney, BoE Governor
The Bank of England revised its short term inflation forecast, saying that there is a high probability that consumer prices will slid to the negative territory shortly but highlighted that there is no risk of persistent deflation in the country. BoE Governor Mark Carney said that inflation is seen falling below zero in the coming months on the back of weak oil prices, and the central bank stands ready to deploy more measures to combat prolonged low inflation. Inflation is expected to reach the BoE's targeted rate of 2% by 2017, sooner than it had predicted three months ago. The BoE sees the CPI inflation at 0% in the three months through June of 2015, hinting it may turn negative in spring. Inflation should then rebound at the turn of the year as cheap oil data drops out of annual comparisons.
Additionally, the central bank raised its growth forecast and expected wages to grow faster. Annual GDP growth in 2015 is projected to remain unchanged at 2.9%, while economic output in 2016 has been revised up to 2.9% from the 2.6% estimated in November. The GDP is then expected to slow to 2.7% in 2017. With regards to the UK's labour market, the policy makers left the forecasts broadly unchanged in February. They see the unemployment rate at 5.6% in the January quarter of 2015 and 5.4% at the same time next year. Investors expect the BoE will begin slowly tightening policy in mid-2016.
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