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The November GDP growth and inflation projections

23 The Committee agreed the projections to be published in the Inflation Report on Thursday 16 November. 24 On the assumption of an official repo rate of 6% over the next two years, the central projection was for GDP growth to slow to around 2½% by early next year and to remain at about that rate. On the central projection, RPIX inflation rose gradually to around target at the two-year horizon, when it was still rising gently. 25 As in previous forecasts, there was a range of views about the most likely outlook for inflation, but views were closer than in recent quarters. The effects of the main differences in assumptions about the supply-side performance of the economy and the outlook for earnings were presented in Table 6.B of the November Inflation Report. 26 The Committee agreed that the uncertainty surrounding the central projections had risen since August, reflecting increased uncertainty about the world economic outlook, oil prices, the pace at which private sector demand was decelerating, and supply-side developments, including earnings growth. The balance of risks to output growth was judged to be slightly on the downside, reflecting the risks to world economic activity. The risks to inflation were broadly balanced.

The immediate policy decision

27 Taken as a whole, the recent news confirmed the picture of a slowing economy, and was regarded as broadly consistent with both the August and the November projections. During the forecast period, output was projected to grow in line with the economy's productive capacity, and inflation was projected as most likely to lie in a narrow range around the 2½% target. The outlook judged most likely was, therefore, very favourable. Members agreed that the central projection was consistent with maintaining the repo rate at 6%. 28 The outlook was, though, more uncertain than in recent quarters, and members varied in the weight they placed on particular risks around the best collective projection.