Whereas we have to accept that we will be unavoidably outside the target range for longer than we would wish, we are determined to bring CPIX inflation back to within the target range within a reasonable time period.
If we seem to be abrogating our responsibilities, inflation expectations could get out of hand, price-setting and unit labour costs could become excessive and we could experience an inflation spiral. As noted earlier, we have already seen evidence of second-round effects, deteriorating inflation expectations and elevated wage demands coming through, and these have required a response to prevent inflation getting out of hand. 4.