Jonathan Loynes Inflation Quotations

Looking ahead, rising gas and electricity bills could keep inflation close to current levels for the next few months. But we expect further falls in core inflation and fading energy effects to push the headline rate well below target in the second half of the year.

We remain comfortable with our view that interest rates will fall further this year as output remains below trend and inflation falls back below its target.

While the stronger-than-expected rise in British GDP put a further dent in the prospects of an interest rate cut in February, we still expect the combination of sluggish growth and falling inflation this year to prompt a modest loosening of monetary policy.

It would have been better to have left the growth forecast unchanged, but that would have lowered the inflation forecast to below its target. They are having to work hard not to have to cut interest rates.

A dovish Inflation Report tomorrow and soft retail sales on Thursday could open the door to a March rate cut.