As set out in the May MPC statement, our latest forecasts suggest that inflation will average 4,9 per cent in 2015, 6,1 per cent in 2016 and 5,7 per cent in 2017, with a peak of around 6,8 per cent in the first quarter of next year.
While the headline forecast deteriorated only somewhat compared to that of the March MPC meeting, the upside risks to the forecast were assessed to have deteriorated quite markedly. And should these risks transpire, we could see a more significant change in the forecast by the next meeting.