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mpc: 24 The Committee's central projection, based on the assumption that official interest rates followed the broadly flat path implied by the market yield curve, was for GDP to grow at around the trend rate over the next two years. Four-quarter GDP growth was projected to fall in the first year of the forecast to a little below its long-term average rate but pick up subsequently. Compared with the August Report, the profile was lower in the short term, reflecting the evidence of weaker growth in 2004 Q3, but higher further out because of the boost to activity from higher equity prices and lower profiles for official interest rates and for the exchange rate. CPI inflation was projected to pick up, reaching the 2% target after two years and continuing to rise a little thereafter. A limited margin of spare capacity, pricing pressures already working through the supply chain and the decline in the value of sterling gave upward impetus to consumer prices in the first year. Demand pressures were still evident in the second year of the forecast. But the direct effects of higher oil prices and the depreciation of sterling on the inflation rate moderated. The profile was broadly similar to that in the August Report.