U.K. Inflation Will Exceed BOE's 2 Percent Target for a Year, NIESR Says

(Bloomberg) -- U.K. inflation will exceed the 2 percent target for another year because the Bank of England cut interest rates too far in 2005, the National Institute of Economic and Social Research said.

Consumer-price inflation will average 3 percent in the three months through June, and stay above the central bank's ceiling until the second quarter of 2008, the London-based research group, whose clients include the central bank and the U.K. Treasury, said today. The forecasts assume a fourth interest-rate increase to 5.5 percent in the second half of this year.


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