MW: BOE: Inflation to rise sharply, then fall back
LONDON (MarketWatch) -- Annual British consumer inflation is likely to rise above the 2% target in the near term due to the reversal of the government's cut in value-added tax and the impact of the British pound's recent decline, the Bank of England said Wednesday in its quarterly inflation report. But downward pressure on prices from persistent "spare capacity" will remain the "dominant force," the central bank said. The BOE said growth won't return to pre-crisis levels for a "considerable time" and warned that future fiscal consolidation will weigh on future growth. The British pound weakened, slipping 0.4% on the day versus the U.S. dollar to $1.6667.
