Hello there,
I'm doing a forecast for the company for the next 5 years. Could you please let me know what official annual inflation rate forecast to use and where I can find it? Thank you.
Replies (5)
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Depends
how you define 'official'.
The Bank of England's Monetary Policy Committee presents a quarterly assessment and forecast on which it bases its interest rate decisions, if this is of use: http://www.bankofengland.co.uk/publications/Pages/inflationreport/2015/aug.aspx
For what it's worth...
...the Treasury use something called the GDP deflator (updated quarterly). Numbers and handy user guide here https://www.gov.uk/government/collections/gdp-deflators-at-market-prices... but in short, just under 2% for next 3 years, then 2.1 and 2.5 after that.
And the Treasury is never wrong, is it?
Can you not just use a pair of dice and a snakes and ladders board? I'm sure that's what the MPC uses. I suspect the Treasury just lick their finger and stick it up in the air to see which way the wind is blowing, but that's Whitehall for you - no imagination.
The government's target is 2%
The government's target is 2%. You could do a lot worse than to use that.