Strong pound could keep UK in deflation

Martin Weale, a member of the Bank’s Monetary Policy Committee (MPC), has warned that a strengthening pound could deliver a shock to the economy and drive inflation even lower. Mr Weale argued that a strengthening pound could result in a rise in imports and fall in exports, that would feed through into lower price growth. The Bank's latest update on the health of the economy stated that it was more likely than not that inflation would fall below zero in the coming months, well below the central bank's target of 2% price growth.