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article The Bank of England is to issue its final rate of inflation targeting the Bank of Canada as it weighs its next move to reduce interest rates.
The Bank of Japan’s target to hit 2% by the end of 2018 and 3% by 2019 was set in December after the Bank set the benchmark at 1.5% in March, which is the central bank’s lowest level in more than five years.
A rise in inflation will make the Bank’s policy rate lower as it would mean a more aggressive rate of interest.
The central bank will also consider a more accommodative monetary policy as well as lowering interest rates in the medium term.
The bank is considering two rate cuts, one in 2020 and the other in 2022, which could result in a further reduction in the inflation target.
However, the bank has also decided to delay its inflation target to the end 2016, because of a shortage of funds.
The central bank is currently forecasting a fall of 0.1% to 0.2% in real terms by 2021, while inflation is expected to reach 1.4% in 2020.
The rate cut could result as the Bank is preparing to lift its inflation targeting to a rate of 2% or more in 2022.
The last rate cut by the Bank was in 2013.
Since then, the Bank has been under pressure to increase its inflation targets, with the Bank last month calling for an increase in its target to 0% in 2022 to keep inflation at the same level as it is now.
The BoE last month also announced that it would raise interest rates from 1.75% to 1.95% for the first time since the financial crisis.
The move is aimed at easing pressure on the banks, but has also sparked criticism from the UK’s Conservative government.
The Treasury has raised concerns about the move and has said that it could cause financial turmoil.
The Brexit vote, which saw voters reject membership of the EU and pull the UK out of the single market, has been blamed for pushing the Bank to reduce its inflation forecast.
A Bank of Scotland spokesman said: “The Bank is working closely with policymakers to develop a revised inflation target for 2019 and the Bank remains committed to a policy of accommodative fiscal policy.”