As we go through this period, the pressures to adapt business models, contain costs, increase productivity and innovate will remain. But such adjustments are actually positive for longer-run economic performance. Inflation is currently consistent with the target. The high exchange rate has lowered prices for tradable goods and services and so helped to hold down measures of inflation over the past couple of years.
But some domestic costs have also slowed, in response to softer demand conditions in some areas, even as prices for things such as utilities have risen sharply. The effect of the carbon price on the CPI so far has, as best we can judge, been broadly as expected.