BoE's King on the inflation outlook

In opening remarks at an appearance before the parliamentary Treasury Select Committee, Bank of England governor Mervyn King said further volatility in inflation is likely in the coming months as retail gas and electricity prices fall.

He also added that the volatility has been going on for some time. "The news in the unexpected fall in inflation from 3 pct to 2.7 pct in January was largely offset by the subsequent unexpected pick up to 2.8 pct in February."

The challenge facing the rate setting

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