Finally, I will talk about some of the ways we review our forecasts, and about the main uncertainties around the current forecasts and how they impact our thinking on monetary policy. It is worth emphasising up front that the Board’s priority is to return inflation to the 2–3 per cent band over time.
Price stability is a prerequisite for a strong economy and a sustained period of full employment. This is what has driven our policy decisions to date and it is expected that further increases in interest rates will be required to meet this objective. The size and timing of future increases, however, will depend on the data.