Inflation will drop - Mervyn.
Sir Mervyn said price pressures still remained "subdued" and weakening demand should see prices fall further, despite CPI inflation hitting a three-year high of 5.2% in September.
Spiralling energy tariffs and mobile phone bills were behind the higher inflation rate, which dwarfs average wage growth of 1.8% a year and comes as unemployment is at a 17-year high. The Office for National Statistics said gas and electricity jumped 13% and 7.5% respectively, food shot up 6.4%, communication costs, driven by mobile phone charges, increased 5.9% and transport prices gained 8.9% on a year ago.
Sir Mervyn defended the Monetary Policy Committee's decision to pump an extra pounds 75bn into its quantitative easing programme.
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|Publication:||Western Mail (Cardiff, Wales)|
|Date:||Oct 19, 2011|
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