The Committee should provide a public contingency plan – that is, provide clear guidance on how it will respond to a variety of relevant scenarios. For example, the Committee recently projected that in 2011, core inflation will be 1.9 percent and that it will fall back in 2012 and 2013 to around 1.7 percent.
It is certainly the case that the rise in import prices prompted by the depreciation of the yen has contributed to the rise in consumer prices. However, as I mentioned earlier, attempts by firms to raise prices can be seen across a wide range of items and are not confined to items affected by import prices.