Mean, median, mode

Has the market got the wrong end of the stick on UK inflation? Investors seized on last week’s Bank of England inflation report which showed that the Monetary Policy Committee’s central projection is that growth in consumer prices will fall back to the 2% target by 2010. That was enough to raise hopes of future interest rate cuts and trigger a steep slide in sterling. But the MPC’s may not be nearly as dovish as that headline figure appeared to suggest. To understand why, remember the differen...