So far as the outlook for inflation is concerned, at the time of our November 2006 Statement on Monetary Policy, after the three policy adjustments made last year, we believed there were grounds to think that the higher inflation outcomes observed up to that time would moderate a little in the period ahead.
We were, admittedly, a little tentative in that judgement, but based on that assessment, the Board elected to leave interest rates unchanged in December. At our most recent meeting two weeks ago, we felt we could be a little more confident in that inflation forecast. We will, of course, see some large movements in CPI inflation in the next few quarters.