Economics weekly by Lloyds TSB

The Bank of England’s projections in the February 2010 Quarterly Inflation Report (QIR) for economic growth (GDP) and for consumer price inflation (CPI) are lower than those made in November last year.

UK Inflation Report implies no rate hike this year

The Bank of England’s projections in the February 2010 Quarterly Inflation Report (QIR) for economic growth (GDP) and for consumer price inflation (CPI) are lower than those made in November last year. This has resulted in financial market expectations of rate rises being pushed out further into the second half of this year. But, as the charts below show, there is still an expectation – derived from overnight index swap (OIS) rates – that Bank Rate will rise to 1% by the end of 2010, to 1¾% in June 2011 and to 2½% at the end of next year.

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