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Is the Bank of England about to change its inflation target?

Today two additional members of the MPC have stepped into the limelight to air their concerns about the Bank of England's current 2% inflation target. While there has been no official confirmation, there is a growing feeling that the Bank of England may well look to increase its inflationary target to take pressure off the Bank of England in the short to medium term. So what benefit would an increase in the inflation target give to the Bank of England?

There is a growing feeling that perhaps the 2% target which the Bank of England has adhered to for some time may well need to be adjusted because of the very different economic environment. On the surface it does look as though the Bank of England, possibly unofficially, has begun a subtle campaign to ready the UK investment market for potential changes in its financial strategy. However, despite the fact that three members of the MPC have now stepped forward with concerns about inflation only one of the members involved has advocated an immediate increase in UK base rates.

It is easy to get the impression that the Bank of England is more concerned about inflation today that it has been for some time although time will tell.

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