MPC's Dale: Inflation will fall to 3% by March

Bank of England chief economist Spencer Dale has predicted inflation will fall to around 3% early next year and is confident the latest round of quantitative easing will prop up the economy.

Dale told Bloomberg he expects inflation to fall to around 3% in Q1 2012 as the impact of VAT and increasing oil prices drop out of the equation. "I expect to see inflation fall sharply next year to hopefully the low 3s (3%) by around March," he said. Dale said the squeeze on household income will ease in line with falling inflation. But he could not say how quickly prices will continue to decline after Q1 next year. Yesterday, the Office for National Statistics said UK CPI inflation declined from 5% to 4.8% in November, in line with forecasts. The Bank of England's inflation targe...