1  Given this evidence, it is not implausible to conclude that supply shock pressures are unlikely to go away by themselves. The difficult question, however, is just how persistent inflation will be. If expectations do not come back to our target, that means price setters will build in higher prices in their contracts.
Similarly, demand for wages will go up, at least to maintain real living standards. What is critical for the MPC is to avoid this spiral, where prices go higher and higher just because everyone believes, for example, that the rand will be worth less and less in future.