FXStreet (Mumbai) – The Bank of England, in its Quarterly Inflation Report (QIR), revised the 2015 and 2016 growth forecasts lower and fired warning shot regarding the disinflationary impact of a strong Pound.
The QIR says, “CPI to remain below 1% until H2 2016 and model forecasts CPI 2017 at 2.1% based on market interest rates last week. Market interest rate assumption based on first rate hike in Q1 2017”
GDP revised lower
Lowers end of 2015 growth forecast to 2.7% from 2.8%
Lowers end of 2016 growth forecast to 2.5% from 2.6%
Weak CPI ahead
Lowers end of 2015 CPI forecast to 0.1% from 0.3%
Lowers end of 2016 CPI forecast to 1.2% from 1.5%
Lowers end of 2017 CPI forecast to 2.0% from 2.1%
End of 2018 sees CPI overshooting target at 2.2%
(Market News Provided by FXstreet)