BoE Inflation Report

February's inflation report released today showed that the 0.5%
contraction recorded in the fourth quarter, according to the advanced
reading which will be subject to revision, was buoyed by the gray
snowfall in December.

But, the BoE expects economic activities to be boosted in the first
quarter amid the rebound in global demand, especially from emerging
economies, and the past depreciation of the pound, yet, on the other
hand, the persistence of the margin of spare capacity, decline in
household spending and fiscal consolidation squeeze are vacant to be
the key obstacles.

With regard inflation, the bank repeated King's announcement in the
Open letter that inflation will range 4% to 5% in the coming few
months to remain above the bank's 2% target for the whole current year
and may in 2012 and it was mainly driven by the rise in VAT to 20.0%
in Jan. from 17.5% last year and the rapid rise in commodity prices.

The BoE, but, foresees that he outlook for growth and inflation is
still uncertain and could not set specific timing for the rebound in
growth and fall back of inflation.

According the aforementioned comments, the bank believes that the
current monetary policy is moving in line with the bank's forecasts.

In synopsis, February's report incorporated that the bank lowered its
growth forecasts and raised its inflation projections compared with
November's report.

Source: ActionForex.Com