26
Aug
Inflation to fall, says deputy governor
Deputy governor of the Bank of England Charles Bean has suggested
there is a good chance of inflationary pressures in the world
economy diminishing over the coming months.
Speaking at an international meeting of central bankers in the US,
Mr Bean warned that there is a possibility of the credit crunch
continuing for some time, although he also said it is a
"transitory" period and healthy economic growth will return in
time.
Regarding inflation, he stated: "On the assumption commodity prices
remain stable and if anything fall back, then inflation should drop
back as we go through next year."
Such a situation could help lower the cost of mortgages as it would
provide more scope for the bank's monetary policy committee (MPC) -
of which Mr Bean is a member - to cut interest rates.
The number of economists who anticipate such a move by the MPC by
the end of 2008 has doubled in a fortnight, according to
Bloomberg.
In a poll on August 22nd the news agency found that half the
economists questioned tipped a cut this year, compared with a
quarter in a survey it held on August 8th.
