LONDON (Reuters) - Britain’s inflation rate will remain above its 2 percent target beyond the Bank of England’s three-year horizon for economic forecasts, Governor Mark Carney said on Thursday
“With ...slack disappearing and the economy growing at rates above its speed limit, inflation is unlikely to return to the 2 percent target without some increase in interest rates,” Carney said in a speech after the Bank raised borrowing costs for the first time in more than a decade.
”...Current market yields, which are used to condition our forecasts, incorporate two further 25 basis point increases over the next three years.
“That gently rising path is consistent with inflation falling back over the next year and approaching the target by the end of the forecast period.”
writing by John Stonestreet