BOE risks of CPI being above or below target in 2 years balanced if rates held at 0.5%, 175 bln QE

The Bank feels the risks of CPI being above or below target in 2 years balanced if rates held at 0.5% , QE at 175 bln. BOE chart shows CPI below target at around 1.4% in 2 years assuming market rate path, QE of 175 bln. More likely than not inflation will fall below 1% in Autumn triggering letter to the government. Rates to be on hold for sometime to come so it seems. This is underminning cable a little, presently at 1.6425. BOE chart shows GDP starting to grow Q-1 2010, reaching just below 3% in 2 years. Tight credit, past falls in asset prices, high public/private debt likely to hinder recovery.

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