Firms’ price-hiking has become widespread and sustained, as seen in the fact that the share of items in the CPI for which prices have risen has been outweighing that for which prices have declined by an increasing margin (Chart 8).
Monthly data for the CPI are susceptible to various factors, such as developments in import prices that reflect changes in energy prices and fluctuations in foreign exchange rates. On the other hand, the underlying trend in inflation is determined mainly by the output gap and medium- to long-term inflation expectations.