BoE predicts fall in inflation

UK inflation will be "unusually volatile" in the coming months and could fall below 1% in the autumn, the Bank of England said in its latest quarterly inflation report.

In the short term, the bank anticipated that inflation will drop well below its 2% target, reaching as low as 1% later in the year, but added that it was uncertain how slack in the economy, the strength of sterling and commodity prices would affect it.

The margin of spare capacity – the difference between potential output and act

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