MPC cautious after inflation figures

THE Monetary Policy Committee voted to sit on its hands today after new figures forecast higher than expected inflation in the years ahead.

Members of the MPC chose to hold the Bank of England’s quantitative easing programme at £375bn and maintain the base rate at 0.5%.

The decision came just 24 hours after the Office for Budget Responsibility increased its forecasts for CPI inflation.

The figures, published alongside the Autumn Statement, suggested inflation will fall to 2.5% in 2013 and 2.2% in 2014. The OBR had previously forecast CPI at 1.9% in each of the next two years.

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