MPC's Spencer Dale warns on inflation Spencer Dale, the Bank's chief economist and a member of the rate-setting Monetary Policy Committee, said "we are not out of the woods yet" on inflation, despite a fall in the annual rate to a 15-month low of 3.4pc in February. The annual rate fell from 3.6pc in January, continuing its downward path since peaking at 5.2pc in September. Lower inflation will provide respite for cash-strapped British households, but it continues to outpace annual wage growth of 1.4pc. Andrew Goodwin, senior economic adviser to the Ernst & Young ITEM Club, said the gap should close through the year although improvement could be derailed by a spike in oil prices. Mr Dale defended the MPC's loose monetary policy stance during the crisis, despite the high inflation that accompanied it. I fully recognise that the period of high inflation and low interest rates has caused pain and hardship to many groups within our society. But it's hard to argue that policy should have been set materially tighter in the face of the most severe downturn in the post-war period. Economists had forecast a bigger fall in inflation in February to 3.3pc, and said the slower fall made more quantitative easing less likely. The current QE programme stands at £325bn. A separate CBI survey showed manufacturers were expecting to raise their prices over the next three months, reflecting rising oil prices.