The rise in prices sits alongside weak average earnings growth in the country, reducing the chances of a rate hike from the BoE this year that would mirror the policy of monetary tightening in the United States. The Bank now predicts GDP to rise by 1.7% in 2017, 1.6% in 2018 and 1.8% in 2019, down from 1.9%, 1.7% and 1.8% as outlined in the May Report. This was followed by hawkish remarks from BoE's Governor Mark Carney and chief economist Andy Haldane, that a rate increase may be needed despite a weakening economy.
John McDonnell, the main opposition Labour Party's top economic official, attended the protest and called for the bank to set an example to employers by raising their wages.
The MPC's updated macro assessment involved a modest downgrade to GDP growth, with the inflation forecast broadly unchanged from May, conditional on a somewhat steeper money market curve. "His main message is that interest rates will have to rise in the next two years because of the damage Brexit is already doing to the economy".
He added: "The assumption of a smooth transition to a new economic relationship with the European Union will be tested".
Given weak productivity, the BOE still sees economic growth being enough to generate domestic inflation pressure and close the UK's output gap within three years. Silvana Tenreyro, who replaced Forbes is most likely to join the doves for now.
Carney said businesses were "somewhere in between" the gloomy outlook of the financial markets and the caution of households. "The immediate threat of higher interest rates (which would, in turn, bring sterling strength) has passed, allowing United Kingdom exporters to continue to use their exchange rate-induced price advantage when selling overseas".
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"We also think that wage growth will pick up, a little later on, but certainly in the next three years we expect faster wage growth".
It has been a year since the MPS first cut the rate to a historic low of 0.25% amid worries of economic collapse and a drop in corporate confidence in the wake of the Brexit referendum.
"There is an element of Brexit uncertainty which is affecting the wage bargaining".
The cost of living had reached a a near four-year high of 2.9% in May, before unexpectedly falling to 2.6% in June.
"The MPC expects inflation to rise further in coming months and to peak around 3% in October, as the past depreciation of sterling continues to pass through to consumer prices".
But the push for an interest rate rise was dealt a setback with last month's news of a surprise fall in inflation, to 2.6% in June, down from 2.9% in May.