In this regard, it must be highlighted that greater restraint over the rise of administrative prices, to the extent that it is within the control of the relevant price-setters, could serve to provide the MPC with increased monetary policy flexibility and potentially with room for a relatively more accommodative stance than would otherwise be the case.
As monetary policy operates with a lag, the level of inflation that the MPC must consider is that which is expected to prevail over the coming 12-24 months. Page 5 of 8  Unfortunately, the inflation forecast is far less benign than the levels currently being experienced.