• MPC expects CPI to fall to around 2% target by end of 2012, helped by lower petrol, energy prices, remaining VAT impact
• Spare capacity likely to continue to bear down on wages and prices beyond 2012
• Pace and extent of CPI fall remain highly uncertain, determined by wages, firms’ profit margins, oil prices
• MPC judged 50 bln QE to be appropriate due to downside risks to medium-term CPI
• MPC will watch euro area prospects and implications for banks, credit conditions, spare capacity and inflation expectations
• Economic rebalancing still has a long way to go, limit to what monetary can achieve when real adjustments required