INFLATION is predicted to remain at a ‘comfortable’ level for the rest of the year.

The Policy Council yesterday released its inflation outlook report, which said the falling cost of oil was likely to have a beneficial impact on RPI and RPIX figures.

‘This continued weakness, together with future prices indicating a fall in the sterling price of oil, is the primary reason why the present central forecast for inflation over the next four quarters is lower than that published earlier this year,’ it said.

Forecasts suggest that inflation will remain below the States’ 3% target for the rest of 2011 before starting to rise gently at the beginning of next year. Figures released last month showed RPIX was running at 2.6% for the 12 months to the end of June.

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