BoE raises inflation estimates for next two years

The Bank of England has raised its inflation forecast for two years' time to around 1.8%, more than some economists had predicted.

The forecast, made in the Bank's quarterly inflation report, will likely dampen expectations of further quantitative easing (QE). Before Wednesday's report, a small majority of economists had forecast a further extension of QE in May, and on average had seen inflation at around 1.6% on a two-year view, up from 1.3% from November's report. Last week the Bank's Monetary Policy Committee voted for another £50bn of quantitative easing over the next three months, taking the total to £325bn. The Bank said growth will be sluggish in the short term with the eurozone crisis posing the bigge...