Positive, low and predictable inflation helps households and businesses plan their spending and investment, helps the economy grow and creates employment. We want prices that grow at a stable and sufficiently positive rate to ensure the economy does not slip into deflation and to enable businesses to adjust to economic shocks without cutting jobs or wages.
For my part, there are five outcomes from the review that are worth emphasising. First, we decided to target inflation at 2 per cent over the medium-term (similar to central banks in other advanced economies).