Inflation `likely to remain above target` through 2012

Inflation will probably rise further before 2011 is over, and will `more likely than not` remain above the 2% target throughout the whole of next year as well. So says the Bank of England`s Inflation Report.

Every three months, the Bank produces this report - for two main reasons. First of all, it helps the Bank`s Monetary Policy Committee members set the base rate as they try to keep inflation near the 2% target set by the Chancellor. Secondly, it helps them `share our thinking and explain our decisions`.

It`s a lengthy report - 56 pages long - but it does provide a lot of useful information, including facts & figures that prove (or disprove) some of the things we`ve heard in recent months. For example:

• Major lenders in the UK didn`t see `widespread` mortgage overpayments last year.
• The `recovery in activity` last year was driven by business, not household spending.
• Companies are more optimistic about the future than individuals.
• Households will need to adjust to the recession`s impact on their `future earnings prospects` as well as their `weak current income`.



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