According to a Financial Times report, the Bank of England (BoE) is facing doubt from financial markets regarding its ability to meet its 2% inflation target. While the BoE's own figures show progress in taming inflation, the markets remain skeptical of the BoE's projections. Last year, the BoE predicted inflation at 3% by the end of 2024, but actual figures revealed inflation closer to the 2% target. UK financial markets expect inflation to average 3% over the next 50 years. BoE deputy governor Clare Lombardelli addressed these concerns in a speech, noting that while inflation had eased, the outlook on salaries and services inflation remains uncertain. Lombardelli expressed concern about the consequences if inflation were to rise and mentioned the need for a gradual removal of monetary policy restrictions. The BoE is working to improve its forecasting models and plans to implement reforms suggested by Ben Bernanke. Some experts argue that central banks should focus on reducing inflation after periods of high inflation, and there are concerns about a potential stagflation in the UK.



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