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King Signals U.K. Inflation Is ‘Obstruction’ to More Stimulus

Bank of England Governor Mervyn King’s forecast for persistent inflation led economists to speculate that policy makers are reversing their shift toward adding more stimulus.

King yesterday unveiled officials’ higher predictions for inflation next year and said it is equally likely to exceed or undershoot the 2 percent target in two years. With evidence the bank is becoming more concerned on consumer prices after fretting about the threat of deflation since 2008, the pound climbed and the 10-year gilt yield rose the most in six months.