In addition, food prices have been running below expectations in recent months, due in part to enhanced competition at the retail level, something we will continue to monitor. Looking ahead, Governing Council expects inflation to move up to close to 2 per cent in the near term, mainly because of firmer energy prices.
More importantly, our growth outlook would imply a narrowing of the economy’s excess capacity over the course of 2017 and into 2018. So in the absence of any new shocks we would expect all inflation measures to converge sustainably on 2 per cent in the latter part of our projection horizon.