Funny how those ultra low rates never do seem to generate inflation as many fear…

*BOE SAYS NEAR-TERM CPI OUTLOOK HIGHER ON POUND, OIL PRICE
*BOE CONSTANT-RATE FORECAST SHOW INFLATION BELOW 2% IN 2 YEARS
*BOE SAYS DOWNSIDE U.K. GROWTH RISKS HAVE `INCREASED SOMEWHAT’
*BOE FORECASTS BASED ON RATE AT 0.6% END 2010, 1.7% END 2011
*BOE SAYS U.K. BUDGET CUTS MAY NEED TO BE `MORE DEMANDING’
*BOE FORECASTS SHOW INFLATION AT ABOUT 1.4% IN 2 YEARS’ TIME
*BOE SAYS NEAR-TERM CPI OUTLOOK `SOMEWHAT HIGHER’ THAN FEBRUARY
*BOE SAYS DOWNSIDE U.K. GROWTH RISKS HAVE `INCREASED SOMEWHAT’
*BOE SAYS U.K. RECOVERY `LIKELY TO CONTINUE TO GATHER STRENGTH’
*BOE SAYS GDP RISKS FROM MARKET CONCERNS ON BUDGET DEFICITS
*BOE SAYS EURO-AREA FISCAL PRESSURES COULD ADVERSELY IMPACT U.K
*BOE FORECASTS SHOW GDP GROWING ABOUT 3.5% ANNUAL PACE IN 2 YRS
*BOE SAYS STIMULUS, POUND, GLOBAL DEMAND SHOULD AID RECOVERY
*BOE SAYS U.K. BUDGET CUTS MAY NEED TO BE `MORE DEMANDING’
*BANK OF ENGLAND RELEASES INFLATION REPORT IN LONDON
*BOE SAYS `SIGNIFICANT’ MEDIUM TERM FISCAL CONSOLIDATION NEEDED
*BOE CONSTANT-RATE FORECAST SHOW INFLATION BELOW 2% IN 2 YEARS

May 12 (Bloomberg) — The Bank of England said risks to the
economic recovery have increased on investor concern about
European budget deficits, and called on David Cameron’s incoming
government to step up measures to tackle the U.K.’s shortfall.
The central bank predicted the economy will sustain its
pickup and reach a 3.5 percent annual pace by the beginning of
2012, while inflation is still likely to remain below the 2
percent target. The forecasts are based on the interest rate
staying close to its record low of 0.5 percent this year and
reaching 1.7 percent by the end of 2011….