The BoE raised its economic projections with regard inflation and growth and they predict the rate to surpass 2% by 2012 if the bank started raising the borrowing cost. Inflation will ramp up in the first quarter of 2010 before reaching 1.1% a year later.

The bank expects the rate to reach 1.6% at the end of the 2 years set by the bank, while it will breach 2% by mid 2012. The rate will be boosted by the depreciation of the sterling and the decrease in sales tax.