B of E expects pressures to ease

Policymakers expect price pressures to ease once short-term factors subside and policymakers are committed to bringing inflation…

Policymakers expect price pressures to ease once short-term factors subside and policymakers are committed to bringing inflation back to its 2 per cent target, Bank of England's Mervyn King said.

Official data this week showed consumer price inflation picked up to 3.1 percent in March, its highest in a decade, forcing Mr King to write an explanatory letter to the government.

In that letter, Mr King said the acceleration in prices had been due to higher energy and food costs.

"The MPC [monetary policy committee] still expects inflation to be closer to our target figure of 2 per cent once this short term volatility, brought about by a number of factors such as energy price increases, has disappeared," he was quoted as saying.

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"Our goal remains unchanged, and we are absolutely determined to bring inflation back to 2 per cent."