BoE's Posen says inflation to drop in 2012

29 Mar, 2011

Bank of England policymaker Adam Posen was quoted as saying on Monday that inflation would drop to 1.5 percent by mid-2012 as the government's austerity drive and a weak economy would lead to a decline in consumer spending.
Posen, who has called for more money to be pumped into the economy, said he would not seek re-election to the Bank's Monetary Policy Committee if his view on quantitative easing turned out to be wrong.
"If I have made the wrong call, not only will I switch my vote, I would not pursue a second term," Posen said in an interview with Britain's Guardian newspaper. Core inflation, which strips out energy and food prices, did not suggest the economy was overheating and it would be costly to take a wait-and-see approach to raising interest rates if there was a risk of an inflationary spiral, Posen told the daily.

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