Bank of England expects inflation to reach target rate by end of year
The Bank currently expects the rate of inflation - which increased to 2.6% in July - to fall to the Government's 2% target by the end of this year.
Governor Sir Mervyn King and his colleagues will also want more time to assess the impact of the UK's £80 billion "funding for lending" scheme, which was launched in the summer with the aim of unclogging the flow of credit.
Bank of England due to announce interest rates held at 0.5%
The Bank of England will hold back from prescribing further doses of emergency medicine for the ailing recovery today amid signs the economy will return to growth.
The Bank's Monetary Policy Committee will maintain interest rates at record lows of 0.5% and leave the targeted size of its quantitative easing (QE) programme at £375 billion as the Bank works through £50 billion of asset purchases announced in July.
Most economists think the nine-strong panel will sanction further QE in November and hold their nerve today, a view reinforced by strong services data released earlier this week.
The Bank of England's policies have been a disaster for savers in general and pensioners in particular. Most of those with savings or pensions have seen their income decimated by policies that have tried to help borrowers and banks, at the expense of those who tried to put money aside for their future. Quantitative Easing (QE) is a massive monetary experiment that has not clearly boosted the economy as intended but instead has boosted inflation and damaged pensions.
– Ros Altmann, director-general of over-50s group Saga
High levels of inflation, which has been kept higher by the Bank's #325 billion quantitative easing programme - combined with low interest rates on savings and current accounts has caused a severe decline in the value of the nation's savings.
Research from accountancy network UHY Hacker and Young shows that even traditionally higher interest savings accounts such as ISAs are below inflation, at an average of 2.6% interest per year.