Bank of England warns inflation crashing at 4%

July 23, 2008 - PRLog -- London (Online-Unsecured-loans) : Mervyn King's number two at the Bank of England, Sir John Gieve, said that inflation in UK is about to accelerate to about 4 percent. This statement was issued by him before he was about to leave the Bank after being criticised over the debacle of Northern Rock.

The Consumer price index, which is the main measure of the UK government to measure inflation and is an invaluable basis for the inflation target of government, is already placed well over the 2 percent inflation target of the Bank of England. The price index is presently running at 3.8 percent. The Bank Governor is required to send a letter to the Chancellor, Alistair Darling, just in case the inflation rate goes even a fraction above 2 percent.

Gieve also pointed out that the hard-pressed homeowners should not expect an immediate relief in context with the interest rates cut in the short term. He also expressed his views on the forthcoming economic prospects of the country and termed the prevailing prospects as 'uncomfortable', with inflation poised to rise further, growth tailing off and unemployment picking up.

The details of voting at this month's 'no-change' meeting is expected to be published next week.

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