Image source, Reuters

The Bank expects the fall in the value of sterling to push inflation higher, potentially all the way up to 2020, Mark Carney says.

"One of the lessons we learnt from the depreciation of 2007-8 is that exchange rate pass through is quite protracted," he tells MPs on the Treasury Select Committee.

A weaker pound makes imports more expensive, which some businesses then choose to pass on to consumers in the form of higher prices.

The Bank's latest inflation report forecasts that inflation, as measured by the consumer price index, will be at 2.4% in three years' time - above the Bank's 2% inflation target.

House of Lords
Parliament

Lord Lamont of Lerwick, better known as ex-chancellor Norman Lamont, is the first speaker in today's marathon 13 hour sitting. 

He notes his surprise that he's up advocating withdrawal from an organisation he campaigned for Britain to join. But he says it's "not we who have changed, but Europe", as evidenced by the name chance from European Community to European Union.

He says he personally voted leave but says leave supporters must "fully accept" that the concerns of the 48% who voted remain must be taken into account, on issues like university cooperation and EU citizens who live here.

He spends a large part of his speech attacking Tony Blair, whose speech last week advocating that the British people could still change their minds, has drawn the ire of Brexit supporters. 

He derides Mr Blair's suggestion that the "full facts" of Brexit were not available. He says that "people have had over 40 years to make up their minds".

He says the bill should be passed without amendment.

Either click on the tab above, to watch coverage of the House of Lords or...

Michael Cockerell says Theresa May's appearance in the House of Lords was to send a message

House of Commons
Parliament

Proceedings in the House of Commons today will start with Foreign Secretary Boris Johnson and his ministerial team taking questions from MPs. 

The SNP's Chris Stephens will introduce his Government Services (Telecommunication Charges) Bill - a ten minute rule bill which aims to restrict charges on government advice calls. 

Later on, the Criminal Finances Bill will advance through its final stages. This will be followed by two motions on social security benefits and pensions. 

Business will end with an adjournment debate on the 100th anniversary of the sinking of the SS Mendi, introduced by Conservative Andrew Murrison.

House of Lords
Parliament

We'll be heading to the House of Lords, shortly, as peers begin another long day of deliberation on the European Union (Notification of Withdrawal) Bill. 

They were talking until gone midnight last night, and today there are nearly 100 peers down to speak. Lord Lamont of Lerwick - the former chancellor Norman Lamont - will be first on his feet today.

There'll be a break at 2.30pm for questions to government ministers, on subjects including human rights abuses in West Papua and air pollution.

But the Brexit bill will dominate proceedings - and peers are expected to sit until midnight tonight again...

Select Committee
Parliament

Conservative MP Stephen Hammond asks if the economy was stronger than the Bank expected following the referendum because 52% voted for Brexit, and so didn't see it as a bad thing. 

Bank Governor Mark Carney says there was actually a sharp fall in consumer confidence in the immediate aftermath of the referendum.

"It's part of the reason the Bank acted as forcefully as it did," he says.

The Bank cut interest rates in August to 0.25% - a historic low. That was one reason why households were able to "look through" the uncertainty caused by the Brexit vote and keep spending, he adds.

Select Committee
Parliament

Chairman Andrew Tyrie has asked all the questions so far in the session. 

Getting into the detail of why the Bank has offered such drastically different growth forecasts in three consecutive reports, chief economist Andy Haldane mentions the "significant" contribution of the Autumn Statement to upwards growth forecast revisions, particularly commitments made to infrastructure spending by Chancellor Phillip Hammond.

Spending on housing, transport and digital infrastructure was promised, running into billions of pounds.

The Bank of England's February report was the first since the Autumn Statement, which was delivered in late November.

Select Committee
Parliament

It's not just Governor Mark Carney appearing in front of the committee this morning. 

As part of what committee chair Andrew Tyrie calls a "high powered team", Bank of England chief economist Andy Haldane is there too. Referring to comments he made in January, the chair asks him if he still thinks that "economics is a Michael Fish profession?".

Andy Haldane says there are "similarities" between economics and meteorology and that both are "given to forecasting errors". He says that the important thing is we "learn from our forecasting errors". 

He goes on to admit that economists as a profession have made "sizable errors", especially concerning the global financial crisis.

But he says that weather forecasting learned from it's own sizable error. "After the '87 hurricane" meteorologists put a "huge amount of effort" into changing their models and weather forecasting is much more reliable.

But he adds that "our problem is intrinsically more difficult than theirs".

Select Committee
Parliament

Image source, PA

The Bank of England governor Mark Carney is appearing before the Treasury Committee to discuss the Bank's latest quarterly inflation report, which made dramatic changes to growth forecasts.

In its February report the Bank says it expects economic growth of 2% during 2017. In November 2016, it predicted 1.4%, and in August it predicted 0.8%.

The Bank said domestic demand had been "stronger than expected". At the time the lower predictions were derided as too gloomy by pro-Brexit campaigners. 

Welcome to another day in Westminster. 

Peers sat until late last night, debating the bill which would give the power to the prime minister to trigger Article 50, and the UK's withdrawal from the EU.

They will be tackling the bill again today from 11am. 

In the meantime, we're going to turn our attention to the Treasury Committee, as MPs question Mark Carney, the governor of the Bank of England.