• Difficult to attribute rise in inflation to one-off factors
• Inflation creep is result of policy being set too loose to prevent downside risks
• UK is poised between 2 outcomes given coming austerity in Europe, recovery outside
• Happy to raise rates if get to positive outcomde
• Not confident we’ll get to that favourable situation, outlook set internationally
• A slow creep in CPI expectations no reason to tighten policy if forecast argues against
• UK economy tentatively in recovery state, still subject to switching to recession