LONDON, Aug 9: The Bank of England said on Wednesday that inflation would move further above target than previously forecast.

The news came in the central bank's quarterly inflation report and followed last week's shock British rate increase which was aimed at keeping inflation in check.

British 12-month inflation was now expected to rise higher than the current 2.5 percent level in the near term, owing to soaring energy costs and higher university education fees, before easing back towards the government-set target of 2.0 percent, the Bank of England said in its report.

The inflation profile is somewhat higher than in the May Report, particularly in the near term, the BoE said.

Elsewhere, the central bank revised slightly upwards its forecasts for economic growth following the 0.8-percent quarterly rise in the second quarter of 2006 -- which had marked the fastest quarterly rate in two years.

The BoE said that GDP (gross domestic product) growth had recovered to near its long-run average, thought to be around 2.5 percent a year, and added that the surveys point to further strengthening.

Its central projection is for GDP growth to rise by about 3.0 percent this year before slowly easing in the subsequent two years.

That compared with the previous report in May, when the central bank had said that British economic growth would remain close to its long-term trend rate of 2.5 percent over the next two years.

Wednesday's report came one week after the central bank announced an unexpected quarter-point rate increase to 4.75 percent.—AFP