A fall in inflation may prove to be merely temporary. But it is a welcome boost to the incoming Governor of the Bank of England Mark Carney.
Inflation is stuck at 2.7% for the third month in a row and there are signs it may actually rise in months to come.
Should the Bank ignore inflation for a while and instead unleash even more radical measures? The answer may rest with Canadian economics...
The rate of consumer price index inflation rose to 2.8% in February, from 2.7% in January, official figures showed today.
The Office for National Statistics (ONS) will release inflation figures for February later this morning. The cost of living is expected to rise driven by the fall in value of the pound increasing the cost of imported goods.
The Bank of England's remit should not change to include anything other than the 2% target of inflation, the outgoing Governor Sir Mervyn King has told ITV News.
In the second of two exclusive interviews with Sir Mervyn, he said: "I'm not sure that there is any call for a major change in the remit."
He added: "What‘s most important is that we commit ourselves again to a very clear target for inflation of 2%."
The Bank of England Governor, Sir Meryvn King, has warned that inflation will rise to 3% or more and remain above target for another two years.
Mr King also predicted a "slow, but sustained recovery."
A spokesman for the Treasury has given the following statement regarding the Bank of England's quarterly report:
As the Chancellor and the Governor have both said, the economy is healing but the road ahead remains difficult.
The Bank of England forecast a sustained recovery in the coming period, and alongside the IMF, predict growth in 2013.
The Bank of England Governor has insisted that the rate of inflation is not out of control, despite the Bank's prediction that it will stay above the 2% target for the next two years.
He told ITV News' Economics Editor Richard Edgar that the higher rate of inflation is "not desirable" but that it would be better to tolerate it in "in the short term" than risk damaging the recovery.
The Prime Minister's official spokesman has said that David Cameron's view on the Bank of England's quarterly report "is that that economy is healing".
Several strong themes emerge from the Bank of England's quarterly report.
Inflation is strengthening, but this has nothing to do with tuition fees or regulated energy prices.
When I asked Sir Mervyn King whether he is saying that higher inflation is okay, he said 'no' but added that it was better than taking it lower and risking killing off a recovery.
Sir Mervyn King said that the recovery of the British economy will depend very much on wider conditions in the world economy.
Announcing the Bank of England's quarterly forecast, he said there is a limit to what domestic measures can achieve.
Bank of England Governor Sir Mervyn King has defended what he described as a "temporary albeit protracted period of above-target inflation".
He said that any attempt to lower inflation to below the 2% target would "risk derailing the recovery".