I’d like to pick up some of the themes from our recent reports. The most intense phase of the financial crisis is now some way behind us. It corresponded roughly to the six-month period from September 2008 to March 2009, which was just following the collapse of Lehman Brothers (along with a number of other high-profile failures in the US and Europe).
The transitory component of the headline, food and fuel, is excluded. This is the standard practice though there are many statistical methods of exclusion. The short point is that core inflation is designed to capture the persistent component of inflation, which is amenable to policy.