Bank of England forecasts strong growth, weaker inflation

The Bank of England (BoE) Thursday forecast strong economic growth in Britain on the back of falling oil prices, adding British inflation could turn negative.

In the bank's Inflation Report, the bank said the robust pace of growth over 2014 is projected to be sustained in the near term.

BoE Governor Mark Carney said output growth remained solid and domestic demand growth robust in Britain.

"The combination of rising wages and falling energy and food prices will help household finances and boost the growth of real take home pay this year to its fastest rate in a decade. This will support solid growth in consumer spending," said Carney.

The bank forecast that British inflation would likely fall further, potentially turning negative in spring, and be close to zero for the remainder of the year.

In the bank's judgment, inflation would reach its 2 percent target in two years.

"This makes it appropriate to return inflation to the target as quickly as possible after the effects of energy and food price movements have abated," said Carney.

Last month, data from Office of National Statistics showed the British inflation rate fell to 0.5 percent in the year to December 2014, almost marking a 15-year low. The main contributions to the fall came from low oil prices. Endit