In the wake of the Bank of England’s (BoE) decision last month to renew quantitative easing, many saw U.K. CPI growth, which recently fell to a 31-month low, as a key factor. However, with weak economic growth persisting while inflation still remains above the BoE’s 2% target, the U.K.’s central bank faces the dilemma of promoting growth despite too high inflation.

ECRI’s latest analysis clarifies the cyclical trajectory of the U.K. inflation rate, indicating whether CPI growth will continue its decline and leave the BoE free to ease policy, or limit bank action by staying above target.