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Credibility now requires higher inflation forecasts

The focus at Friday’s meeting of the Policy Board will be on the new GDP and inflation forecasts to be published in the Bank’s “Outlook for Economic Activity and Prices”. Monetary policy itself was overhauled at the first April meeting and it is unlikely that any additional measures will be announced this week. However, the “bold easing” and further clarification of the 2% inflation target will surely prompt some substantial upward revisions to the projections for inflation, and possibly tweaks to the growth numbers too.

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