The British economy remains strong and the government supports the Bank of England's aim to get inflation back to its target, finance minister Alistair Darling said on Wednesday. "The Government stands behind the 2 percent inflation target, and will continue to support the Bank's decisions to ensure inflation comes back to target," Darling said.
"Employment remains near record highs, interest rates are historically low and the past decade of rising incomes and job creation puts us in a much stronger position than in previous decades."
Inflation surged to 4.4 percent in July, more than twice the central bank's target, and the highest since the current series began in 1997. The BoE's new forecasts on Wednesday showed the central bank expected to spike to around 5 percent this year before falling back sharply to the 2 percent target in two years, boosting expectations for an interest rate cut by year-end.