The report shows inflation falling to 2 per cent by mid 2015, on the basis that the main bank interest rate remains at its current rock bottom of 0.5 per cent into 2016.
And the cost to the supplier of immediate cash payment by the bank, in respect of the implicit interest rate or discount on the bill, ought to be tiny - because the bank is in effect lending to the safe big company, which ultimately honours the bill, not to the riskier supplier.
The financial markets were boosted by a surprise decision by the US central bank to cut the interest rate at which it lends money to commercial banks.
There was unanimity in the decision to keep the bank's main interest rate unchanged at the record low of 0.5 percent.
In late March, the People's Bank also raised the interest rate it charges banks.
Kevin Mountford, of Moneysupermarket.com, said that the margin between the Bank rate and the interest paid by savings accounts was actually very high at present.
The discount rate is the interest rate that the central bank charges commercial banks that need to borrow additional reserves.
The Item Club says that the change should be used by the Treasury to "review the remit" that it gives the Bank's interest rate-setting Monetary Policy Committee.
On Thursday the European Central Bank and the Bank of England will have interest rate decisions announced.
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Barroso's comments come in support of Jean-Claude Trichet , the president of the European Central Bank, who raised the key interest rate for the Eurozone--the group of European Union member states which has adopted the euro-- to 3.5% on Thursday as his bank remains vigilant on inflation.
The central bank doubled its main interest rate, but at the cost of killing consumer demand.
One explanation for all the confusion is that it reflects a deeper uncertainty about why the Bank adopted its zero interest-rate policy in the first place.
This will require further measures beyond the current zero interest rate policy of the Bank of Japan.
The Federal Reserve has been flooding the banking system with cash, so much so in the last week that it has pushed the effective overnight interest rate below the central bank's target 2%.
The government was swift to take advantage: hours after the sale, the Central Bank cut its benchmark interest rate to 19.75%, below the pre-October level, though still far above inflation, now slowing toward an annual rate of some 2%.
Last month, India's central bank, the Reserve Bank of India, cut its key interest rate to 7.75% from 8%, the first such move in nine months.
The inflation figures come ahead of minutes due to be published on Wednesday of the Bank's April interest rate meeting.
The European Central Bank's latest interest rate rise failed to rally the currency as well, with many analysts stressing that structural reform is needed for the euro to strengthen.
When the bank took over interest-rate policy from the Treasury in 1997, it gave up its role as manager of public debt as well as its job supervising banks.
However, the IoD said that aggressive interest rate cuts by the Bank of England last year coupled with rising public spending should stave off a recession this year.
The leasing companies borrow from a bank at one interest rate and offer the lease at a higher one to the driver, making money on the spread.
The June gilt future fared poorly on expectations that the report might yet instill an interest rate increase from the Bank of England.
Last month the Central Bank raised its benchmark Selic interest rate by 0.75%, the first rise in nearly two years.
In addition, several of the world's central banks, including the U.S. Federal Reserve and the European Central Bank, took the unprecedented step of synchronizing interest rate cuts to kickstart credit markets.
All that said, the provision of loans to banks by the Bank of England at an effective interest rate of 0.75% has brought down the cost of mortgages and the cost of small business loans.
India's economy is projected to have grown just 5.0% last fiscal year, slower than the 9% expansion it was averaging just before the global financial crisis, hurt by the steep interest-rate increases by the central bank in 2010 and 2011 to control inflation.
U.S. stocks are now turning higher this morning after the European Central Bank cut its key interest rate by a quarter percentage to 1% in an effort to boost the economy.
The Korean central bank's move came after a similar move in Brazil, where the central bank cut its Selic base interest rate by a quarter of a percentage point to 7.25% Wednesday.
One nurse consultant I spoke to told me that being asked to vote on whether or not to accept the deal felt a bit like trying to decide whether or not to take out a bank loan without knowing the interest rate.
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