Economic outlook to be upgraded by Bank of England

Economic outlook to be upgraded by Bank of EnglandThe Bank of England is expected to raise its outlook for the UK economy and job prospects when it comes out with its quarterly inflation report today.

The policy makers pledge that they will not consider lifting rates above the current historic low of 0.5% until employment rate has reached 7%.

During the time when the policy was launched at the last inflation report in August, Bank forecasts predicted this would not be possible until at least the third quarter of 2016.

However minutes after last month's meeting of the Monetary Policy Committee (MPC) it revealed that the Bank believed unemployment rate was declining and the economy was growing faster than previously expected.

Latest figures show a sharp fall in inflation to 2.2%, its lowest level in more than a year. It means the Bank is close to achieving the 2% target for Consumer Price Index (CPI) inflation which it last achieved in November 2009 when it was 1.9%. However, the Bank has assured that unemployment reaching the threshold will not be an automatic trigger for policymakers to raise rates.

Economic adviser to the EY ITEM Club, Nida Ali, stated: "Inflation is coming down much quicker than the Bank's expectations. In light of the latest developments, we are likely to see a big downgrade to inflation."