5 charts from the Bank of England that show inflation is on its way
Inflation will more than double to overshoot the Bank of England's 2% inflation target in 2018, driven up by a falling currency, the central bank said.
"In the central projection, inflation rises from its current level of 1% to around 2.75% in 2018, before falling back gradually over 2019 to reach 2.5% in three years' time," the Bank said in its inflation report published on Thursday.
The BOE warned that it may be forced to raise interest rates to deal with rising prices.
"There are limits to the extent to which above-target inflation can be tolerated. Those limits depend, for example, on the cause of the inflation overshoot, the extent of second-round effects on inflation expectations and domestic costs, and the scale of the shortfall in economic activity below potential," the Bank said in its report.
After years of next to zero inflation, the spectre of rising prices, and rising interest rates, is creeping back. The Bank of England has some clear charts, below are a few that explain what is going on.