The inflation outlook has been improved to some extent by a number of variables that previously were seen as upside risk factors. As mentioned above, the international oil price has declined significantly and global food price inflation appears to be moderating although is yet to feed through to domestic consumer prices.
Domestic demand pressures have also subsided as household consumption expenditure has responded to the less accommodative stance of monetary policy. Consumption expenditure has also been influenced by negative wealth effects, as housing and equity markets have weakened.