“The purpose of an inflation target is to provide the central bank with a rule for making monetary policy decisions. For that purpose, a target band is not necessary: a single point target is sufficient” (William A. Allen: Inflation Targeting: The British Experience, a Bank of England publication). A fixed point, however, is much more difficult to hit than staying within a range.
Moving within a band also leaves some discretion to the central bank and can also provide more flexibility in the case of unforeseeable future price shocks. What models should be used for forecasting inflation? 3  BIS Review 31/1999  It must be understood that inflation targeting is about the future.