The first is that all euro area countries need to be able to thrive independently. This means that every economy has to be flexible enough to find and exploit their comparative advantages, so as to benefit from the Single Market.
But for today’s discussion, I want to use the May projections as the basis for some remarks about the nature of the inflation target. As you know, since 1993 the Bank has been framing its monetary policy around a mediumterm target for inflation of 2-3 per cent, on average, “over the cycle”. The Reserve Bank remains committed to achieving that target.