Bank of America: Inflation undershoots likely to continue

CPI expected to be 1.3% in 2021

Bank of America expects inflation to persistently undershoot the Bank of England's inflation target if there is a Brexit deal.

The Bank of England currently sets an inflation target of 2% to keep it stable and low. Bank of America forecasts CPI inflation to be 0.9% in 2020, rising to 1.3% in 2021. However, it expects RPI inflation to be higher at 1.9% next year. UK inflation fell to its lowest level in four years in August, dropping to 0.2%. 7IM Real Return boosts inflation protection after being hurt by 'crushed' expectations Bank of America expects the output gap - the difference between potential and actual output - structural disinflationary pressures caused by the Covid-19 pandemic will continue to...