In December, twelve-month CPI inflation stood at 0.2%, almost 2 percentage points below the inflation target, while oil prices were more than a third lower, in sterling terms, than a year earlier.
Overall, the MPC said "these factors can explain the vast majority of the deviation of inflation from the target in December, and to an even greater extent than at the time of the November Inflation Report".
Additionally, wage growth has been weaker than anticipated and labour costs are expected to rise a little less quickly than thought at the time of the November Inflation Report, contributing to a slower recovery in inflation.
The MPC now expect CPI inflation to remain below 1% until the end of the year, but remain adamant that it is likely to exceed the 2% target slightly at the two-year point and then rise further above it.
This central projection for inflation is modestly below that of three months ago for much of the forecast period, but broadly similar by the end.
At its meeting ending on 3 February, the MPC judged it appropriate to leave the stance of monetary policy unchanged. The MPC will now only say that "it [is] more likely than not that Bank Rate will need to increase over the forecast period to ensure inflation remains likely to return to the target in a sustainable fashion".
