LONDON (Reuters) - Bank of England policymaker David Miles said that he expected inflation to be close to 2 percent by the end of this year, substantially below what the central bank forecast in February.
“We are now back to slightly under 3 percent and I think it will hover around this level for a good part of this year - but it’s more likely than not that as we go into next year, inflation will be quite close to 2 percent,” he said in an interview with the Belfast Telegraph.
Inflation is currently 2.8 percent and the central bank forecast in February that it would peak above 3 percent later this year before easing slightly to just under 3 percent in early 2014. It is not forecast to fall below its 2 percent target until early 2016.
The central bank will publish new inflation forecasts in May. Miles’s views may not be representative as he is among the minority of policymakers who back more quantitative easing asset purchases.
Miles also said that he expected the squeeze on Britons’ disposable incomes over the past four years to ease as inflation fell.
Reporting by David Milliken