Finally, I will talk about some of the ways we review our forecasts, and about the main uncertainties around the current forecasts and how they impact our thinking on monetary policy. It is worth emphasising up front that the Board’s priority is to return inflation to the 2–3 per cent band over time.
In an environment of greater transparency and enhanced communication, expectations are high on the delivery of our results. As central banks, we have to be knowledge intensive institutions and derive our influence mainly from the quality of our arguments, which requires a strong research function. Central bank continuity provides institutional memory. A central bank accumulates knowledge both from research and experience.