THE Bank of England (BOE) said that it expects stronger growth on the back of lower oil prices but it sees little need to raise interest rates this year and could even cut them if inflation proves weaker than expected, new forecasts showed on Thursday.
BOE governor Mark Carney said that he expected inflation to fall below zero in the coming months due to weak oil, but stressed that this by itself did not mean that the economy had entered deflation.
Inflation would hit the BOE's 2 per cent target in about two years' time, it said, sooner than it forecast three months ago.
In its analysis, the BOE lowered its 2015 inflation forecast to 0.5 per cent from 1.4 per cent. For next year, it sees inflation...