In addition, market-based measures of expectations over the longer run (5 to 10 years) indicate that break-even inflation rates remain at elevated levels. More recently, while these rates have declined to around 7 percent from 8 percent in December, they are significantly above the average level for 2015 and the upper inflation target level.
While there is little evidence of a deterioration in longer-term inflation expectations, they are anchored at elevated levels. So in essence, inflation expectations over the forecast horizon, as well as over the longer term, are uncomfortably close to the upper target level and this has been one of the factors considered by the MPC at its most recent meeting in March 2016.