As output growth continues to exceed potential, we expect companies to invest in additional capacity and draw from this slack in the labour market, thereby expanding potential output further. This process is difficult to forecast but is likely to become increasingly evident as we approach full potential. This is an important reason why monetary policy is not on a predetermined path.
It will remain highly datadependent as we move forward. One key indicator of progress will continue to be wage inflation, which has shown signs of a pickup in recent months but remains restrained by the lingering effects of the adjustment to low oil prices. Meanwhile, inflation has continued to fluctuate in the bottom half of our target range.