We no longer calculate “underlying inflation” in the way we used to do, and that is true for a whole raft of reasons, including the fact that there was always some public suspicion that “underlying inflation” was a Reserve Bank invention to help Don Brash keep his job.
But the reality which that term reflected is as valid today as it was a decade ago. In other words, we are not interested in trying to use monetary policy to suppress the price changes which emanate from international oil price changes or from changes in indirect taxation.