The Governor of the Bank of England, Sir Mervyn King, delivered his final inflation report today, in which he predicted that inflation would fall to around the Government's 2% target by the end of 2014.
Although inflation is expected to remain above 2% for the next two years, BoE figures imply that it will reduce towards the latter part of 2015.
The Bank upgraded its forecast for the UK's economy to 1%, up from its initial prediction of 0.9%, with output growing by 0.3% during quarter one this year, resulting in the UK narrowly avoiding falling into a triple-dip recession.
In a statement, Sir Mervyn declared that a recovery was in sight.
"Today there is a welcome change in the economic outlook. Today's projections are for growth to be a little stronger and inflation a little weaker than we expected three months ago," he said.
"That is the first time I have been able to say that since before the financial crisis. But this is no time to be complacent, we must press on to ensure a recovery and bring down unemployment," he warned.
Sir Mervyn is due to stand down as the Bank's Governor this summer, with the current Canadian Central Bank Governor, Mark Carney taking up the position.
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