LONDON (AP) - The Bank of England has raised its inflation forecast for this year, increasing expectations that it may soon be forced to hike its base lending rate.
Bank of England Governor Mervyn King said Wednesday that the Bank expects consumer price inflation - currently 4 percent - to remain above the government target of 2 percent for the rest of the year.
King says this forecast is more pessimistic than in August, because of higher import prices caused by a lower pound on and higher prices for energy and a range of commodities.
He stressed, however, that judgments either way remain difficult.
The Bank of England has kept the base lending rate at an all-time low of 0.5 percent for nearly two years.