The Bank would want to estimate the impact of technological developments on trend inflation and, assuming the impact was temporary, see through it, provided that inflation expectations remained well anchored. There is a lot more work to be done to understand both the size and persistence of these effects.
A third issue is wage growth, which has been slower than would be expected in an economy that is approaching full output. Hourly wages increased at an annual pace of 1.7 per cent in the second quarter, and growth has been subdued for months, although there were signs of an increase in the latest monthly employment report.