Mervyn King. Image by Bloomberg.

Hello and welcome to the live blog on the Bank of England’s Inflation Report press conference.

This post should update automatically every few minutes, although it may take longer on mobile devices.

12.12 The live blog is now closed.

Key takeaways:

• The MPC’s fan charts now show inflation more-or-less on target over the forecast period, and the risks to inflation are now judged to be broadly balanced. This would suggest that there will be no more QE in May. However, the MPC has also left itself some wriggle room, as inflation is still shown to be a little below target over the next couple of years. The governor also said inflation was “more likely to be below the target than above it for a good part of the three-year forecast period”.
• The UK economy is still set to recover gradually, though the numbers may “zig zag” over the course of this year as a result of the Queen’s diamond jubilee.
• Charlie Bean appeared confident that productivity levels would recover (see 11.25). And the governor was also surprisingly forthcoming in acknowledging that there may be flaws in the inflation targeting framework (see 11.36 and 10.53).

11.39 The press conference ends. In response to the final question, the governor says the 25 per cent fall in the real exchange rate is here to stay. Otherwise wage costs would have risen as a result of sterling’s depreciation. Read more