Taking account of these recent developments, it is reasonable to expect that, although CPI inflation is likely to remain elevated over the coming months due to lagged pass-through of earlier increases in import prices, it will decline gradually in line with the expected moderation of worldwide commodity price inflation and tapering-off of import-price pass-through.
However, we see risks in this main scenario, which are on the upside. As I mentioned earlier, increases in energy and materials prices are long-run phenomena, rather than temporary, reflecting the growing importance of emerging economies. Moreover, since this is the first outbreak of noticeable inflation in a decade, it may eventually change inflation expectations of households and firms' price-setting behavior.