welcome. let me start with the situation welcome. let me start with the situation as we see it on the outlook situation as we see it on the outlook for the economy. the outlook for growth outlook for the economy. the outlook for growth and unemployment has improved~ for growth and unemployment has improved. six months ago we expected a shallow improved. six months ago we expected a shallow but long recession. since then energy prices have fallen substantially and economic activity is holding substantially and economic activity is holding up better than expected. so today is holding up better than expected. so today we forecast modest but not positive so today we forecast modest but not positive growth and a much smaller increase positive growth and a much smaller increase in positive growth and a much smaller increase in unemployment. we think inflation increase in unemployment. we think inflation will fall quite sharply over inflation will fall quite shar
more detail on the news conference on the thinking behind the decision to raise interest rates from 4.25% to raise interest rates from 4.25% to 4.5%. they are ticking questions. i refer to a lot of the shops in my opening remarks. ticking questions. shocks. it is the test of this regime how we deal with them and how we do turn inflation back to target. i think you can look at that from two lenses, one what is causing the shock and how they and how do we deal with them in terms of inflation target? it is the intent of the regime we have sustainable inflation over the medium term. that is what we are doing, we have to adjust from
capitat half a percent. temporary 100% capital allowances for qualifying business investment and measures aimed business investment and measures aimed at business investment and measures aimed at increasing labour market participation seem to have positive effects participation seem to have positive effects on participation seem to have positive effects on potential supply. the outlook effects on potential supply. the outlook for inflation. annual consumer price inflation is come down consumer price inflation is come down from consumer price inflation is come down from a peak of 11.1% in october last year down from a peak of 11.1% in october last year but down from a peak of 11.1% in october last year but remains very high. the latest last year but remains very high. the latest figure of 10.1% for march were latest figure of 10.1% for march were 0.8% than we expected at the time of were 0.8% than we expected at the time of the were 0.8% than we expected at the t
this may expected in the february report. this may reflect rebuilding of margin this may reflect rebuilding of margin such as wage growth and effects margin such as wage growth and effects of margin such as wage growth and effects of higher energy and other import effects of higher energy and other import costs. the extent to which firms import costs. the extent to which firms pass import costs. the extent to which firms pass on these costs will influence firms pass on these costs will influence the rate at which it declined influence the rate at which it declined. while cpi inflation is expected to fall quite sharply as energy expected to fall quite sharply as energy costs begin to ease albeit at a somewhat sore layback slower pace than projected in february the outlook than projected in february the outlook for inflation is uncertain and depends on the extent of persistence and wage and price setting persistence and wage and price setting. as shown in chart eight in
inflation remains too high and it is ouriob get inflation remains too high and it is ourjob get it and to have it stay there ourjob get it and to have it stay there this ourjob get it and to have it stay there. this is why today we have increased there. this is why today we have increased the bank rate by 0.25 percentage points to 4.5%. low and stable percentage points to 4.5%. low and stable inflation as the foundation of stable stable inflation as the foundation of stable economy and we have to stay the of stable economy and we have to stay the course to make sure inflation stay the course to make sure inflation falls all the way back to the 2% inflation falls all the way back to the 2% target. in the monetary policy the 2% target. in the monetary policy report we presented a we have revised policy report we presented a we have revised projections for growth in the uk revised projections for growth in the uk economy. in the central projection the uk economy. in