BoE's forecast confirms loosening stance

The Bank of England's February 2001 inflation report confirmed marketexpectations that UK interest rates were likely to head down over thecourse of 2001.

Mervyn King, deputy governor for monetary stability, who presented thereport despite a bout of flu, painted a sunny picture of the UK economy,but argued for caution.

In November 2000 the committee predicted an inflation spike early in 2001. Infact, inflation has remained subdued, because, Mr King explained, thecommittee had expected more